President Trump’s trade war is forcing companies to cut costs, raise prices, shrink profits, discontinue products and find other suppliers.
Shock. That was the first response to the Trump administration’s barrage of tariffs.
Businesses that rely on imported products expected duties, which President Trump had promised. Just not this high, this universal or this sudden, with almost no time to adjust. A 145 percent tariff on all Chinese products, after all, is more like a trade wall than a mere barrier.
But shock is settling into reality, and corporate leaders are trying to manage. Here are the main tacks that businesses are taking — at least for now, given that whatever duties the White House declares today may change tomorrow.
Move out of China, preferably yesterday
For many importers, this round of tariffs isn’t as painful as it might have been eight years ago. Mr. Trump’s first trade war, in 2018, while milder, pushed many to diversify their sourcing beyond China. The Covid-19 pandemic sent yet another signal that dependence on a single market, however cheap and efficient, is unwise.
For William Westendorf, the chief executive of the medical supply distributor Air-Tite Products, the final straw was a 100 percent tariff on Chinese-made syringes imposed by the Biden administration last fall. He sent a staff member to scour Europe for a factory that could meet the Food and Drug Administration’s exacting standards.
After six months of hunting and hoop-jumping — and with Chinese syringes now tariffed at 245 percent total — Mr. Westendorf has a shipment on the way from Turkey. It’s lucky timing, because factories outside of China are getting flooded with orders.
“It’s not something you can do real quickly because of the regulatory environment,” Mr. Westendorf said. “Fortunately, we were there early.”