
Key insights
- On February 1, President Trump announced potential tariff action against Canada, Mexico, and China.
- Tariffs remain a fluid topic that we expect could change daily.
- Business owners may need professional advice for help assessing the impact on their operations, exploring alternative suppliers, and understanding the potential impact of tariffs on the economy.
Help your business adapt to changing tariff policies.
Announcing tariffs … increasing tariffs … postponing tariffs … the headlines keep coming related to actions against Canada, Mexico, and China. When adjusting strategy amid volatility, what steps can be considered now related to tariffs on Canada, Mexico, and China?
Why were the tariffs enacted?
President Donald Trump has long socialized additional tariffs on imports from Canada, Mexico, and China. Trump enacted the tariffs because he says Mexico, Canada, and China must be held accountable for failing to halt illegal immigration and stop fentanyl and other drugs from entering the United States. The administration says contraband drugs like fentanyl have created a national emergency and a public health crisis.
What tariff rates are proposed?
The tariffs include:
- A 25% additional tariff on imports from Canada and Mexico
- A 10% additional tariff on imports from China
- A lower 10% tariff on energy resources from Canada
How have China, Mexico, and Canada officially responded?
By end of day Monday, February 3, the United States, Canada, and Mexico agreed to delay tariffs for one month while they work to address the president’s concerns. If an agreement is not met through negotiations, Canada intends to levy its own 25% tariffs on $155 billion worth of U.S. imports, including a wide range of products such as alcohol and fruit. Mexico may follow suit.
On Tuesday, February 4, China announced its own levies of 10 to 15% on some U.S. products.
How should business leaders adjust to the new tariffs?
If you are a business leader impacted by these tariffs, it’s essential to stay informed about the latest developments and understand how the tariffs may impact your operations or personal finances.
Consider the following steps:
Assess the impact
Evaluate how the tariffs may affect your supply chain, costs, and overall business operations. Identify any products or materials that may be subject to the new tariffs and calculate the potential cost increases. Monitor currency exchange, direct and indirect tax, and other pricing drivers.
Explore alternatives
Look for alternative suppliers or sources for products affected by the tariffs. Diversifying your supply chain can help mitigate increased costs.
Stay informed
Keep up to date with news and updates on the tariffs and any potential changes or negotiations that may occur.
Government websites, industry associations, and trade organizations can be valuable sources of information. CLA will also continue to monitor the situation. Subscribe to CLA communications for insight delivered directly to your inbox.
Seek professional advice
Consult with trade professionals, legal advisors, and/or financial consultants to understand the full implications of the tariffs and develop strategies to navigate challenges.
Consider strategies designed to lower the value of imported goods affected by tariffs. Bear in mind these tariffs may be temporary, and tariff mitigation efforts should be balanced against the possibility of a short-term return to normal trade relations.
Advocate for your interests
Engage with industry groups, trade associations, and government representatives to voice your concerns and advocate for policies supporting your business and industry.
How CLA can help businesses adapt to tariffs
The new tariffs have significant implications for businesses, and our industry professionals offer comprehensive strategies to help you adapt. From assessing the impact on your operations to exploring alternative suppliers and understanding the potential impact of tariffs on the economy, we’ve got you covered.
Contact us
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