The Tariffs Have Arrived: Now What?

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President Trump’s Rose Garden announcement on April 2^nd went pretty much as expected, with the president putting in force a wide range of tariffs on goods being imported to the U.S., including a sweeping 25% tariff on all automobiles made outside of the country and a baseline 10% minimum tariff for all imports.

China took one of the biggest hits on what was being called “Liberation Day.” Already dealing with existing tariffs of 20%, the country now faces fresh duties of 34%, for a total tariff rate of at least 54%. In his speech, the president said tariffs were designed to boost domestic manufacturing.

“The action amounts to a historic tax hike that could push the global order to a breaking point,” AP reports. “It kickstarts what could be a painful transition for many Americans as middle-class essentials such as housing, autos and clothing are expected to become more costly, while disrupting the alliances built to ensure peace and economic stability.”

Making a Statement

The White House sees things differently. In Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits, which was published on the same day as the announcement, President Trump declared a “national emergency” and vows to investigate the causes of “our country’s large and persistent annual trade deficits in goods.

“Large and persistent annual U.S. goods trade deficits have led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries,” the document states.

Measuring the Potential Impact

On the supply chain front, companies are scrambling to make sense of the new levies and deciding how to handle them. And while the verdict is obviously still out on just how the sweeping, double-digit tariffs will impact the world’s supply chains, that hasn’t stopped experts from speculating about “what may happen” if the tariffs stay in place (or, increase at some point).

“The building supply sector, particularly lumber dealers, will be significantly impacted by tariffs, especially regarding imports from Canada,” Epicor’s John Carrico told Hardware Retailing. “Distributors that are going to be most successful and able to weather the potential impact of planned tariffs will need to be flexible and adaptable in their approach to supply chain disruption.”

Fierce Network says the tariffs could be “devastating” for telco supply chains, based on feedback rounded up from several industry analysts. “The impact to each system vendor will vary,” Dell'Oro analyst Jimmy Yu said, “depending on whether other countries will place reciprocal tariffs and how much those tariffs slow down economic growth.”

Ericsson and Nokia will likely have a lower exposure to the tariffs, said neXt Curve Executive Analyst Leonard Lee, “as both vendors have established local U.S. manufacturing presences and partnerships,” the publication reports.

Concerns About the Electronics Supply Chain

The Institute for Interconnecting and Packaging Electronic Circuits (IPC) issued a strongly-worded statement outlining its key tariff concerns and the potential for major supply chain impacts. The electronics industry association says a strong U.S. electronics industry requires a comprehensive approach that pairs targeted investment and incentives with policies that enhance mutually beneficial trade partnerships.

“Trade is essential to supply chain resilience, innovation, and cost competitiveness,” IPC states. “Without it, tariffs risk raising costs for American businesses and further driving production offshore.” IPC argues that while a stronger domestic electronics industry is essential, policies must foster global collaboration rather than hinder it.

The association has called for a balanced strategy that supports domestic growth while maintaining international supply chain stability. “Electronics design and production are the backbone of innovation and industrial resilience across all sectors of the economy,” Richard Cappetto, senior director of North American government relations, said in the statement, “and we stand ready to work with the administration on a bold strategy to rebuild this vital sector.”