KOMPUTER JADUL-,The move by United States (US) President Donald Trump to finally impose a 25% tariff on the country's two largest trading partners, Canada and Mexico, and an additional 10% on China has left business people haunted by uncertainty. They have begun to take a number of steps to mitigate these tariffs.
Quoting Reuters, Tuesday (3/4/2025), Trump's tariffs take effect today. The Republican president argued that these tariffs were imposed because Mexico and Canada were unable to handle the flow of immigrants and fentanyl into the US. On the other hand, tariffs on China were also addressed to stabilize the trade deficit to that country.
These additional levies have dominated discussions among American companies this year. Since the beginning of 2025, more than 750 giant US companies have discussed the topic either at investor events or at earnings conferences at that time.
In recent weeks, several companies have also competed to order goods in advance. However, executives have so far taken a wait-and-see approach to investment and spending, as Trump has changed his plans for tariffs several times since re-electing as president.
Trump has also promised additional tariffs on the European Union and an investigation into copper and lumber imports that could result in levies on those goods. Other countries have vowed to retaliate against Trump’s tariffs.
“The uncertainty continues,” said David Young, an executive at the Conference Board, a global business group. “There are decisions being delayed and postponed … there is a level of paralysis that is very real.”
Executives have also tried to reassure investors that they will be able to mitigate or pass on additional costs. But some have expressed frustration with the White House’s policy shifts.
“With respect to tariffs, I think your guess is as good as mine. Things are changing day by day,” Hilton Schlosberg, co-CEO of Monster Beverage, told analysts on the company’s Feb. 27 earnings call.
Confidence Has Been Damaged
The uncertainty has severely dented business and consumer confidence in recent weeks, after initially improving following Trump’s re-election. The ISM Manufacturing Index, a leading gauge of consumer sentiment, showed a sharp jump in inflation expectations in February, with suppliers citing tariffs across the board.
U.S. consumer confidence also fell to an eight-month low in February as inflation expectations soared. Major retailers such as Walmart and Lowe’s warned of significantly slower demand.
“That’s the uncertainty that’s driving customer anxiety,” Autodesk CEO Andrew Anagnost told investors.
“That’s what we want to move past. We want to move toward certainty (in) policy … uncertainty is not something our customers want to deal with.”
In Trump’s first term, he focused on combating what his administration saw as predatory behavior by China in global trade markets. In addition to Canada and Mexico, Trump also imposed a 10% tariff on Chinese goods, and threatened tariffs on Beijing-made ships.
The U.S. imports $900 billion worth of goods a year from Canada and Mexico. The two countries, along with China, have highly integrated supply chains in the auto industry, where parts can cross borders multiple times during the manufacturing process.
Trump advisers and supporters say their goal is to bring more manufacturing to the U.S. to reduce the country’s record trade deficit.
“While tariffs are inflationary and may hurt in the short term, they will be good for American jobs in the long term,” said Justus Parmar, CEO of Fortuna Investments.
Some companies have said they could move some production to the U.S., including Honda and Pfizer, but that would add costs. And the move has been seen as a short-term maneuver.
“It’s a huge waste of resources,” said Pat D’Eramo, chief executive of Canadian auto supplier Martinrea. “I’d rather try to reduce my costs so we can be much more competitive.”
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