US businesses prepare for more pain when 'Liberation Day" tariffs loom
Businesses all over the world are eagerly awaiting details about the new tariffs that President Donald Trump has imposed on his trading partners. This is the latest in an extensive series of duties that have been imposed by the U.S. since he returned to the White House at the beginning of this year.
Trump is expected to announce the new duties at a ceremony on Wednesday at 4 pm Eastern Time (20:00 GMT), dubbed "Liberation Day".
Administration officials say that Trump's tariffs are cumulative, and include previous rates.
Following U.S. businesses are most likely to be affected by Trump's tariffs.
AUTOS & ELECTRIC VEHICLES
Trump announced last week 25% tariffs on imports of all automobiles and auto parts from outside the U.S. These duties will 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.
Trump announced in February that he intended to impose tariffs on semiconductors and other related products of about 25%.
Executives 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
Trump has threatened to impose a 25% tariff on pharmaceutical products, which were previously spared trade wars because of the potential harm. This is especially true for those imported from the EU.
The move by Trump to raise tariffs on Chinese goods, including finished medicines and raw ingredients, and the initial round of tariffs between U.S. & EU on steel & bourbon has led to expectations that drugs will be added.
Reports from April 1 stated that drugmakers were lobbying Trump for a gradual introduction of tariffs on imported pharmaceuticals in order to reduce the impact and allow time to switch manufacturing.
PC MAKERS
Tariffs on China could lead to price increases for PC manufacturers such as Dell.
Dell announced in February that it was reviewing tariff orders and added the announcements had not yet affected its pricing.
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. Companies have put pressure on suppliers to lower prices in categories such as toys and cake pans.
As they source half their products from Vietnam, sportswear and apparel makers such as Nike, On Holding, and others will be affected if tariffs are implemented.
Following the February tariffs 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.
Separately any disruption of a trade loophole known as "de minimis", that allows goods worth less than $800 in the U.S. to enter duty-free with minimal inspections will also hit discount online retailers.
The de minimis exemption is used by e-commerce companies like Shein, PDD Holdings' Temu, and Alibaba AliExpress to keep their prices low.
ENERGY & RESOURCES
Canadian uranium producer and miner Cameco said that if tariffs were implemented, the price of uranium for U.S. firms could increase by 10%, which would be a major blow to a country like the United States, who relies heavily on imported ore.
Analysts and traders predict that the retail price of gasoline in the United States will rise as a result of the new levies.
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. Some Airlines have started reducing flights in order to prevent lowering of fares and protect margins.
(source: Reuters)
