Tariffs are here
Most major are tariffs were on hold then back again for 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 up to a 245% (This includes a 125% reciprocal tariff but not on electronics, etc). 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 businesses have to do is decide on how much inventory to stock up on and how much they will increase prices. And, then - see if its even possible to find U.S. based suppliers - 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
