Ahead of the wide-ranging tariffs expected from the second administration under President-elect Donald Trump, business executives say they're planning to make modifications to their supply chains to minimize the risk of disruption and the effect on cost.
According to a new poll from The Conference Board, 71% of U.S. CEOs are planning to shake up their supply chains in the next three to five years or are already in the process of doing so. That's up from 54% who said the same just last year.
Across the Atlantic, the survey found the share is even greater, with 77% of European CEOs planning to adjust their supply chains — up 16 percentage points from 2024.
Many economists warn that Trump's tariff proposals, which include a 100% tariff on imported Chinese goods and a 10%-20% general tariff, could create sticker shock for consumers, causing prices to climb higher than those of the post-pandemic inflationary period.
For businesses that rely on low prices to drive their sales volumes, a wholesale tariff could have a huge impact on overhead costs and could also be passed on to customers.
"The whole point of a retailer like Temu is to sell a large volume at a low profit for each item. This means that they don't have much room to lower the price before it is not worth making the sale," Dean Baker, senior economist with the Center for Economic Policy and Research, wrote on Friday.
In defending his tariff proposals, Trump has argued that they will help protect U.S. industries from international competition and return jobs to American workers by bringing employment, especially in manufacturing, back to U.S. shores.
Although he campaigned heavily on lowering prices for inflation-weary voters, Trump told Time magazine after he won the election that doing so would be difficult.
"It's hard to bring things down once they're up … very hard," he said, referring to grocery prices.
The Hill reported that imports have been surging at U.S. ports in anticipation of the incoming administration's plans, with the Port of Los Angeles receiving close to a million 20-foot containers in October — a 25% jump on the year. In November, volumes were up by 16%.
The Conference Board also found that CEOs had concerns about a recession, a lack of talent among job seekers about artificial intelligence, public debt levels in the U.S., and increased trade competition with China.
Nicole Weatherholtz ✉
Nicole Weatherholtz, a Newsmax general assignment reporter covers news, politics, and culture. She is a National Newspaper Association award-winning journalist.
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