US Businesses brace themselves for more pain when Trump imposes reciprocal tariffs

The U.S. president Donald Trump announced on Wednesday a number of reciprocal duties on trading partners, the latest of a long list of duties that have been imposed by him since he returned to the White House in early this year.

From April 5, the U.S. is imposing a baseline 10% tariff on all imports into the country and will be increasing duties for several of its largest trading partners.

Levies may be especially damaging to U.S. firms in sectors that have already been hit with duties.

Following U.S. businesses are most vulnerable to Trump's tariffs on reciprocal trade:

AUTOS & ELECTRIC VEHICLES

Trump announced last week that he would impose 25% tariffs on imports of all automobiles and auto parts from outside the United States. The duties are set to take effect on Wednesday.

Detroit Three automakers, Ford, General Motors, and Stellantis, have a greater exposure to manufacturing outside the U.S. than Elon Musk's Tesla, and are therefore more at risk.

Semiconductors did not appear on the list of goods that are subject to reciprocal duties, despite Trump's statement in February that he planned to impose tariffs around 25% on imports of semiconductors.

Industry experts warned that the 34% tariffs on China could be disruptive to manufacturers of chips, PCs and semiconductors.

Executives at U.S. semiconductor companies and artificial-intelligence networking equipment makers say that the immediate impact of any tariffs is "uncertain."

The CEO of Nvidia, a major industry player, has stated that the company will move its manufacturing to domestic locations in response to increased tariffs. However, he expects a minimal impact on short term.

PHARMACEUTICALS

The announcement on Wednesday exempted pharmaceutical products from the trade wars, due to their potential harm. This is a temporary relief for the drugmakers.

Drugmakers in the United States have lobbied Trump to gradually introduce tariffs on imported pharmaceuticals in order to reduce the impact of the charges, and give time for a shift in manufacturing.

Officials said that Trump plans to impose additional tariffs on pharmaceuticals.

PC MAKERS

Tariffs on China could lead to price increases for PC manufacturers such as Dell.

In February, the research firm International Data Corporation reduced its traditional PC forecasts for 2025 to 2025 and beyond due to tariff-related risk.

Retail & E-Commerce

Walmart, Target and Best Buy, among other U.S. retail giants, have prepared for the likely impact of tariffs on their key suppliers, particularly China. These companies have put pressure on their suppliers to lower prices in categories such as toys and cake pans.

Trump imposed a 46% tariff on Vietnam. This will impact apparel and sporting goods makers, from Nike to On Holding as they source around half of their products in the country.

Following the February tariffs imposed on goods imported from Canada, Mexico, and China, alcohol makers, including Brown-Forman, Diageo, Anheuser-Busch Constellation Brands Molson Coors Beverage, have been caught up in the crossfire.

Mexico and Canada were spared new tariffs by Trump on Wednesday, as he exempted the top US trading partners from the 10% global tariff baseline. Previous duties are still in effect.

Discount online retailers will also be affected by the elimination of the "de minimis" trade loophole, which allowed goods worth less than $800 dollars to enter the U.S. without paying duty and with minimal inspections.

The de minimis exemption is used by e-commerce companies such as Shein and Temu, owned by PDD Holdings. Alibaba's AliExpress also relies on it to keep its prices low.

ENERGY & RESOURCES

The White House confirmed Wednesday that imports of refined products, oil, and gas were exempt from Trump's new tariffs.

Separate tariffs for critical minerals are being considered. The U.S. uranium price could increase by 10%, according to Canadian uranium producer and miner Cameco. This would be a heavy burden for the country, which relies heavily on imports.

Investment banks expected a surge in capital markets and dealmaking activity following the Republican Party's election victory.

But economic uncertainty, partly caused by tariffs, has dampened this optimism.

The KBW Regional Banking Index is down nearly 7%. Analysts at Raymond James warned on Tuesday that profit estimates were at risk due to uncertainty, which is causing businesses to adopt an "wait-and-see" approach.

Travel

As economic uncertainty has increased, both tourists and businesses have cut back on their spending. This has forced carriers to lower their expectations for the first quarter. Several airlines have started reducing flights in order to prevent a drop in fares, and protect their margins.

(source: Reuters)