Holding Pattern on Tariffs Until April 2nd, 2025
Most major are tariffs are on hold again until April 2nd, 2025 - that will affect Mexico, Canada, and the EU on steel, lumber, consumer goods, etc. - businesses are wondering how best to react and plan for the future. Tariffs on imports from China were increased to 20%, are now in place. Large retailers like Target are already planning to raise prices.
Most companies that import materials and consumer goods have had to start planning on how to react to higher costs and other disruptions. While some manufacturing could be brought back to the U.S. - it could also raise expenses for business that will see higher production costs.
Looking back on our previous blog post about the consequences of tariffs, taxed countries can counter with retaliatory tariffs, U.S. consumers and companies will pay the price (literally). Plus, inflation is already putting a further strain on consumers in an already tight economy. As we mentioned above, while the tariffs have been temporarily paused for Mexico and Canada - Canada still plans on enacting counter tariffs on American goods - calling the U.S. tariffs a ‘trade war.’ This could then lead to reciprocal tariffs levied against goods from Canada entering the U.S.
The U.S. Chamber of Commerce claimed tariffs were meant to stimulate more manufacturing in the U.S. - thereby reducing the trade deficit - plus, to slow fentanyl trafficking into the country. However, most U.S. businesses order their supplies from neighboring countries. With future tariffs, small and large businesses will have have to increase their prices - since their suppliers’ costs will be affected. The question remains, how long will it take to see negative results versus positive ones from these tariffs?
Ashli Watts, President and CEO of Kentucky Chamber of Commerce, says “Our economy depends on trade, it’s how we thrive.”
The next thing business have to do is pan for what may happen again on April 2nd and then, plan beyond that date - to decide now, whether stock stock up on supplies to increase their inventory, or find U.S. based suppliers (if possible), or take a cautious approach, to just hold off on buying, taking a wait-and-see approach.
Stay tuned.
Sources:
U.S. Chamber of Commerce: 'I'm afraid': Small Businesses Speak Out on Tariffs | U.S. Chamber of Commerce
Reuters: https://www.reuters.com/world/us/trump-tariffs-arrive-companies-brace-more-uncertainty-2025-03-04/
CNN: https://www.cnn.com/2025/03/04/business/target-earnings/index.html
ABC News: What to know as tariffs go into effect on Mexico, Canada, China - ABC News
USA Today: Trump pauses tariffs: Mexico won't be required to pay on any goods
