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U.S. businesses scramble as Trump’s steel tariffs threaten supply chains

David Ijaseun by David Ijaseun
February 14, 2025
in News
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Trump tarrifs

Trump tarrifs

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Industries reliant on steel and aluminum are bracing for a financial storm as U.S. President Donald Trump announces 25% tariffs on key imports. From automakers to beverage giants, executives warn that these measures could disrupt operations, inflate costs, and force tough decisions on supply chains.

Ford Motor Co.’s CEO Jim Farley summed up the growing concern, saying the tariffs add “a lot of cost and a lot of chaos” to American businesses. The automotive industry, already navigating supply chain challenges, faces added pressure as the tariffs are set to take effect in mid-March.

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Rising Costs, Strategic Shifts

Ford, like many other companies, is weighing options to mitigate potential damage. Executives are evaluating ways to build up inventory and reduce dependency on imports from Mexico and Canada. General Motors has already taken preemptive action, cutting international plant inventory by 30%-40% before Trump’s inauguration.

Meanwhile, Coca-Cola is considering shifting from aluminum cans to plastic bottles if costs spike. The company is also closely monitoring the ripple effects on its global operations, as consumer preferences and supply chains adapt to the new reality.

In the fragrance industry, Coty has increased U.S.-based production to sidestep tariff-related hurdles. By boosting inventories and ramping up output in North Carolina, the company hopes to shield its operations from the escalating costs. However, Coty shares fell 7.4% following the announcement, highlighting investor anxiety about the broader impact of these tariffs.

Uncertainty Clouds Business Decisions

The unpredictability of Trump’s trade policies is creating anxiety across sectors. David Gitlin, CEO of Carrier Global, echoed the sentiment during the company’s earnings call: “There’s so much we don’t know. Will exemptions be granted? Will these tariffs even take effect?”

The White House’s track record of abrupt reversals has left businesses guessing. Earlier this year, Trump scrapped a similar tariff against Colombia after only 12 hours. Companies are left wondering if lobbying efforts or diplomatic maneuvers could soften the blow.

Stock Market Reactions and Global Ripples

The uncertainty has also rattled global markets. Shares in Chinese automakers Xpeng and Geely tumbled on Tuesday, reflecting fears of broader economic impacts. In the U.S., Coca-Cola shares rose 3.6% amid optimism over its strategic pivot, while Ford and other automakers braced for potential turbulence.

The Path Forward

With the tariffs looming, U.S. companies are employing a mix of strategies: stockpiling inventory, exploring alternative materials, and passing costs onto consumers. However, the road ahead remains fraught with challenges. As these tariffs threaten to reshape industries, the question remains: how far can businesses stretch before the chaos overwhelms them?

For now, executives are walking a tightrope, balancing immediate needs with long-term stability. Amid the uncertainty, one thing is clear: the cost of these tariffs is more than financial—it’s reshaping the future of American industry.

Read more on Trump tariff threats shake Canadian Aerospace industry, threaten supply chains

Tags: Donald TrumpFordHeadline

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