Trade Tariffs: What I’ve Learned Talking to Industry Leaders
Over the last 3 weeks, I’ve been on a listening tour to understand the POV of leaders in different industries affected by trade tariffs. These are people with businesses based in Europe, USA and Asia, ranging in size from tiny to multi-billions in revenue. I’ve met with dozens of executives from bicycle, footwear and apparel industries. They all do some or a lot of manufacturing in Asia. Here’s what I’ve learned:
1. Exasperation and anger over the tariffs is 100% unanimous among those I’ve met with. There may be some business people who make things in Asia and support the tariffs, but I have yet to meet one of them.
2. Manufacturing cannot be just “moved back to America” overnight. This Asian supply chain has been built over 40+ years, and while we can do some manufacturing here, that will take years to ramp up. Furthermore, many of those working in Asian manufacturing are paid $1-$5 per hour. So for some low skilled, labor intensive assembly lines (vs automated w/ less labor), if we want to manufacture in the U.S., we’ll need to choose between Americans getting paid that way OR paying $250 for a pair of Nike shoes at Dick’s Sporting Goods that used to be $79.99.
3. The general public is slow to catch on to the crisis that is about to arrive in America, because we’re mostly still buying things that were shipped here before the tariffs increased prices. Many executives I met with felt that things are going to get real around Memorial Day, when current stocks of goods run out, shelves start going bare and prices increase.
4. Zero brands I’ve met with are just going to swallow the increased costs that come with tariffs. They’re all passing those on to retailers or distributors, who can choose to do what they want with pricing. Safe to assume the customer will have to pay more.
5. Every business I’ve met with feels mostly paralyzed: they can’t do any planning because the tariffs have been changing every week, or even more often. The tariffs are a confusing mess that varies by country and every week some industry (cell phones, automobiles) gets a partial reprieve. Do goods from China get taxed at 145% or 170% due to the additional 25% tariff on countries that import Venezuelan oil? Some businesses are already letting go of employees, and they’re thinking about where they’re going to cut other expenses for 2026.
6. The damage has been done — even if tariffs were to go away (or back to 2024 levels) tomorrow, the international community has lost trust in the US, consumer confidence has gone off a cliff, and now that the global economy has been broken apart, it may never get put back together the same way.
My conclusion is that it’s going to be a very challenging few years under the current administration. Fasten your seatbelts.
