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President-elect Donald Trump’s continuing threats of massive tariffs are sparking global supply chain concerns as both American and European companies are frontloading orders and considering raising prices while Chinese factories look for buyers outside of the U.S.
Businesses across the world are pushing out orders ahead of Trump’s inauguration January 20, choosing not to wait to see which products or countries will be on the list of targets in Trump’s expected trade war.
The president-elect’s threat of universal tariffs has set off a scramble to get orders out that’s creating bottlenecks and higher costs.
The president of the brokerage and logistics advisory firm Krieger Worldwide in Los Angeles, Robert Krieger, told Bloomberg: “We’re still in the freakout period.”
“There’s about to be a king tide in the supply chain,” he added.
At JLab in California, CEO Win Cramer moved his supply chains away from China to avoid tariffs during Trump’s first term in the White House. He has put in place a hiring freeze until June, and he will impose price hikes on headphones and wireless products if universal tariffs are put in place.
Some companies are frontloading orders, while others are looking for new suppliers or trying to negotiate new agreements with their current suppliers. Consumers are set to pay for the higher costs that come with larger inventories, expedited shipping, or beginning relationships with new business partners.
But while preemptive moves can be made, there’s no way to know for sure if they will insulate businesses from Trump’s trade actions.
Last month, Trump threatened to add an additional 10 percent tariff on Chinese products and another 25 percent on all goods from Canada and Mexico.
Raine Mahdi is the CEO of Zipfox, which sources products between businesses in the U.S. and factories mostly based in Mexico. According to Mahdi, the company has had a 30 percent rise in quote requests and signups of new buyers, adding that requests also rose when Trump threatened 100 percent tariffs on BRICS nations.
Most of the requests are from goods importers taking in products from China.
“If you wait too long, you’re going to find yourself trying to make the transition in a pinch,” Mahdi told Bloomberg. “This time you’re not catching the tail end of the Trump administration, you’re catching the entire thing and with a new wrath.”
In the two weeks around the election, the ports in China had a double-digit growth in container throughput which kept rising to an almost 30 percent gain in the middle of this month.
Similarly, International freight flights have risen by at least a third every week since the middle of October and economists believe that trend will continue as customers frontload orders.
This month, the CEO of the Port of Long Beach, Mario Cordero, told reporters that the “surge in imports nationwide could continue into the spring of 2025.”
“Back in 2018, tariffs initiated during the first Trump administration resulted in a 20 percent decrease in imports from China and a 45 percent decrease in exports to China due to retaliatory actions,” he added.
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