Whether you think he’s a negotiator, as he claims, or a TACO (Trump Always Chickens Out) as many people on Wall Street and elsewhere increasingly claim, there’s no question that Donald Trump’s ongoing tariff war has been devastating for businesses around the world.
How devastating? A new study by the Reuters news agency says so far it has cost companies in America and elsewhere more than $34 billion in lost sales and higher costs. The Penn Wharton Business Model from the University of Pennsylvania — which Trump himself attended, earning a BA — estimates his tariffs will reduce GDP in the country by 6 percent over the long-run, cut wages by 5 percent and ultimately cost a middle-income household $22,000 over its lifetime.
And based on the latest developments coming out of the White House — or the golf course — that number is only going to get higher.
Call it on-again-off-again, flip-flops, boomerang, ricochet, unpredictable, inconsistent, erratic, fluctuating and even spasmatic — all words and phrases used to describe Trump’s tariff actions — but the end result is the same: bad for business and impossible for companies to navigate, never knowing which executive actions will stick and which ones will be reversed…or ignored.
In the meantime, companies that import and sell products that are made overseas — China primarily, but also the rest of Asia as well as Canada and Mexico and even Europe — are stuck expending an enormous amount of time and resources trying to figure out how to deal with this. Not only that, but in many cases, how to stay in business. One large importer of soft home products that primarily come out of China said that a few weeks ago when tariffs were 145 percent, he was looking at having to shut down his company since it would be impossible for it to sell its merchandise at these much higher prices. He’s still not sure he can survive given the uncertainties surrounding the situation. He is far from alone.
In the meantime, deadlines come and deadlines go, carrots and sticks are offered in a dizzying array and it’s likely we will start to see higher prices and lower demand hit the retail marketplace this month.
The carnival game of Whack-a-Mole where you never know where the next thing will pop up has become all too real for tariff-stricken companies. Except it’s not a game for them.
WarrensReport 