Donald Trump has vowed to unleash a raft of decrees from “day one” of his US presidency that will include orders for mass deportations and harsh tariffs – but with no explicit timeline to help supply chain stakeholders prepare.
CEO of Vespucci Maritime Lars Jensen said: “A key event for stakeholders in the container shipping supply chain is the expected signature of a raft of presidential decrees following the inauguration of Donald Trump today.”
He warned that some “might entail the swift introduction of new tariffs”, which would have “an impact on sourcing patterns, and hence both the volume and routing of cargo”.
Indeed, during his campaign and in the run-up to his inauguration, Mr Trump has relentlessly threatened varying levels of tariffs on various countries, including 60% on goods from China and 10-20% globally.
Many have highlighted that placing import tariffs on all countries shipping cargo to the US would have an inflationary impact on domestic businesses and consumers, but it’s not just US businesses that will be hit.
Matthew Clark, international trade partner at accountancy and business advisory firm BDO, warned that UK businesses “won’t be immune” to the “significant repercussions” of tariffs to advance US domestic and foreign policy objectives.
He urged UK businesses to “understand and prepare for new trade dynamics” that he warned could lead to supply chain disruption, increased costs, higher administrative burdens, and increased tax complexity
He suggested that UK companies exporting to the US adopted “proactive measures”, such as “confirming the correctness of goods classification and verifying the true country of origin for goods shipped to the US”.
“There may also be important transfer pricing implications, so finance directors will need to do some careful modelling to understand the implications of potential tariff changes on related party transactions for goods imported into the US,” Mr Clark added.
He suggested that global businesses may ultimately need to consider their wider supply chain and operational footprint, which could mean changing their sourcing locations and/or manufacturing activities.
However, Henrik Schilling, MD for global commercial development at Hapag Lloyd, told The Loadstar Podcast that “fluctuations in trade volumes are common” and “trade will find its way” – albeit with a higher price tag and a headache for sourcing managers.
“We have seen that global trade volumes did not shrink during the first Trump administration. So, in effect, they continue to grow,” Mr Schilling concluded.
Source: By Charlotte Goldstone, The Loadstar