President Trump Imposes Tariffs on Mexico, Canada, and China
President Trump has imposed 25% tariffs on Mexico and Canada, and 10% tariffs on China, making good on a campaign promise and key economic philosophy of his administration. While the move has implications for various sectors, including oil, autos, and the consumer, many companies across the economy have been preparing for a new tariffs war for months.
Large companies in consumer sectors, such as Walmart, Columbia Sportswear, and Lenovo, have been working to get as much product as they can into the U.S. ahead of the possible tariffs. This includes importing critical goods for infrastructure projects, such as solar panels, backup power supply items, and lithium batteries used in data centers.
Companies are being advised to prepare for the swiftness of the tariffs, with experts noting that they are not interested in debating the efficacy of tariffs as economic policy, but rather want to know when the impact will be felt and by how much, and which products.
Bringing in products early requires storing them in warehouses, which incurs additional costs, but companies are willing to absorb these costs to avoid paying the tariffs. Large companies can afford to frontload products, but smaller companies may not have the same luxury.
The impact of the tariffs will be felt by more than just importers, with even companies that have made efforts to restructure supply chains and manufacturing operations being unable to avoid significant impacts. The cost of tariffs will likely be passed on to consumers, who may experience sticker shock when prices increase.
The warning signs of the tariffs’ impact are already being seen, with companies like Deer Stags, a family-owned shoe retailer, already preparing to increase prices. The firm’s president, Rick Muskat, notes that the company’s “razor-thin margins” make it difficult to absorb the cost of tariffs, which means consumers may ultimately be left to pay the price.