Despite that standard, the Trump Administration has pledged to create a new bureaucratic body it calls the External Revenue Service to collect tariff payments from foreign entities, even though foreign countries and companies do not pay any money to cover tariff charges in the nation that buys their goods.
That clash between economic realities and political threats has created turmoil among U.S. businesses, who have broadly opposed the strategy of tariff hikes ever since the November presidential election.
The impact could be particularly harsh for American manufacturers, according to Kerrie Jordan, Group Vice President, Product Management at supply chain software vendor Epicor. “If higher tariffs go into effect, imported goods will cost more,” Jordan said in a statement. “Companies must assess the impact of higher prices and create resilient strategies to absorb, offset, or reduce the impact of higher costs. For companies that import foreign goods, they will have to find alternatives or pay the tariffs and somehow offset the cost to the business. This can take the form of building up inventory before tariffs go into effect or finding an equivalent domestic alternative if they don’t want to pay the tariff.”
Tariffs could be particularly painful for U.S. manufacturers that import raw materials—such as steel, aluminum, or rare earth minerals—since the impact would have a domino effect throughout their operations, according to a statement from Matt Lekstutis, Director at consulting firm Efficio. “Based on the industry, there could be a large detrimental impact on a company’s operations. If there is an increase in raw materials or a delay in those shipments, as being the first step in materials / supply chain process, there is the possibility of a ripple down effect into the rest of the supply chain operations,” Lekstutis said.
New tariffs could also hurt consumer packaged goods (CPG) retailers, which are already being hit by the mere threat of tariffs in the form of inventory fluctuations seen as companies have rushed many imports into the country before the new administration began, according to a report from Iowa-based third party logistics provider (3PL) JT Logistics. That jump in imported goods has quickly led to escalating demands for expanded warehousing, since CPG companies need a place to store all that material, Jamie Cord, president and CEO of JT Logistics, said in a release
Immediate strategies to cope with that disruption include adopting strategies that prioritize agility, including capacity planning and risk diversification by leveraging multiple fulfillment partners, and strategic inventory positioning across regional warehouses to bypass bottlenecks caused by trade restrictions, JT Logistics said. And long-term resilience recommendations include scenario-based planning, expanded supplier networks, inventory buffering, multimodal transportation solutions, and investment in automation and AI for insights and smarter operations, the firm said.
“Navigating the complexities of tariff-driven disruptions requires forward-thinking strategies,” Cord said. “By leveraging predictive modeling, diversifying warehouse networks, and strategically positioning inventory, JT Logistics is empowering CPG brands to remain adaptive, minimize risks, and remain competitive in the current dynamic market.”
With so many variables at play, no company can predict the final impact of the potential Trump tariffs, so American companies should start planning for all potential outcomes at once, according to a statement from Nari Viswanathan, senior director of supply chain strategy at Coupa Software. Faced with layers of disruption—with the possible tariffs coming on top of pre-existing geopolitical conflicts and security risks—logistics hubs and businesses must prepare for any what-if scenario. In fact, the strongest companies will have scenarios planned as far out as the next three to five years, Viswanathan said.
