As Donald Trump begins his second term as President of the United States (Potus), the global trade landscape is poised for significant changes.
Trump's policies, particularly his emphasis on tariffs and protectionism, are expected to have far-reaching implications for international trade, logistics and supply chains.
Trump has announced plans to impose "universal tariffs" on imports from all countries, with a focus on Chinese goods.
This move is part of a broader protectionist agenda aimed at bolstering domestic manufacturing and reducing reliance on foreign imports.
According to Neil Shearing, group chief economist at Capital Economics, "the key point, over and above everything else, is that we don’t really know exactly what tariffs will be put in place, when, and at what level”.
These tariffs could lead to retaliatory measures from other countries, potentially escalating into a trade war.
Warren Maruyama, former general counsel of the Office of the US Trade Representative said: "It’s pretty clear that if we put tariffs on Canada and Mexico, they’re going to retaliate with tariffs on us.”
Such actions would disrupt established trade routes and add volatility to logistics markets.
The anticipated tariffs and protectionist policies are likely to increase costs for goods entering the US, affecting supply chains globally.
Supply chain management academic at Bayes Business School, Dr Florian Lücker, highlighted that additional tariffs could dampen demand for goods produced in countries like the UK and sold in the US, creating challenges for supply chain managers.
Alex Saric, CMO at industry software services provider Ivalua believes that a second Trump term will likely see a greater escalation of tariffs and "Buy American" provisions. He advises organisations to prepare for nearshoring or onshoring operations and to adapt strategies in response to shifting tariffs and trade agreements.
Experts predict that these tariffs could lead to a decline in GDP across affected countries. A study by the London School of Economics suggests that Trump's proposed tariffs could reduce US GDP by 0.64%, China's by 0.68%, and the UK's by 0.14%.
Retaliation measures could worsen the situation, potentially leading to a global GDP loss of 0.56% in 2025.
Overall, there seems to be consensus that as Trump's second term unfolds, businesses must prepare for potential disruptions in global trade and logistics.
The emphasis on tariffs and protectionism could reshape international trade dynamics, impacting supply chains and logistics operations worldwide.
Trade analysts emphasise the need for adaptability and strategic planning to navigate these changes effectively.
Article Sources: Global Finance, Ashurst, Metro, Bayes Business School, Procurement Magazine, Fastmarkets, NPR and Reuters.
