Business, Freight News, Logistics


Trump plays the trade card

[ January 14, 2025   //   ]

With the re-election of President Donald Trump to the White House in January, the world is closely watching his stated intention to impose tariffs on US international partners, says Adam Grimshaw, compliance manager at Customs Support Group.

This is no longer election sabre-rattling, and it isn’t his first rodeo as far as punitive trade sanctions are concerned. In his first term, the President-elect imposed tariffs on steel and aluminium from China.

But this now looks like a mere dress rehearsal for his second term, where he promises to supersize the theme by imposing additional fiscal penalties on more countries, including the US’s closest trade partners, as part of an even more protectionist economic packet of measures.

From day one of his new presidency, he has openly talked about 25% tariffs on Canada and Mexico unless they agree to tougher border control – another Trump election pledge – and an additional 10% tariff on goods from China. 

Such pledges understandably stoke concerns as fears grow over potential trade wars, rising inflation and interest rates, not to mention the potential for harm to the US’s own domestic market.

For example, in the automotive industry, imported components in complex just-in-time supply chains can cross international borders multiple times during manufacturing. The end result could be self-defeating, with US consumers paying more for vehicles.

International businesses hate risk, hidden costs and uncertainty. The changing face of compliance in the often-byzantine customs clearance process is seen as a necessary evil they need to be able to navigate at arm’s length, as it does not fall under a core competence in the world of supply chain economics.

CSG’s recentCustomer Radar survey of its logistics service provider and goods owner clients consistently outlined three themes – the challenge of complying with ever-more complex customs regulations; a shortage of internal expertise to address these issues; and the opportunities and threats posed by AI.

Ultimately, all three trends can be distilled to a common concern – the fear of non-compliance risks. This underscores the vital role of customs knowledge and expertise – what we call Real Intelligence – as the key to enhancing AI or navigating the complex and evolving regulatory landscape amid geopolitical disruptions.

Outsourcing to a specialised organisation in tune with the vagaries and nuances of customs clearance and knowledge of its digital navigation has never been more attractive, which is why it’s important to try and explore the potential impacts of Trump’s tariffs on supply chain resilience.

We are exploring various models – from maintaining the status quo to the likely impact of 20-60% tariff models and even the implications of the UK/US/EU trade agreement – and their effects on international trade dynamics.

There is no denying that tariffs typically lead to higher prices for consumers as businesses pass additional costs on to customers. This can reduce purchasing power and alter consumer behaviour.

They can also disrupt established supply chains leading to inefficiency and increased costs for businesses relying on imported materials or components.

Furthermore, other countries may retaliate with their own tariffs on exports from the imposing country, leading to trade wars that can escalate and impact global markets.

But in the words of Donald Rumsfeld, there are still too many known unknowns at play, including the mired picture of US companies importing Chinese goods scrambling around for tariff exemption permits arguing that they are critical to the domestic economy. During the first Trump term there were thousands of petitions for such exemptions.

Scenario mapping can help futureproof businesses as do trusted partnerships in the management of what will become complex customs arrangements. This enables businesses to better anticipate developments and steer a calmer course through choppy waters.

Tags: