Photo: Shutterstock/Strikernia
Global trade uncertainty is forcing U.S. companies to urgently reassess their supply chain strategies as new tariffs threaten major disruptions across multiple sectors.
According to John Donigian, Moody’s Senior Director of Supply Chain Strategy, automotive manufacturers face particular challenges as tariffs on Canadian and Chinese auto parts are expected to increase manufacturing costs and could trigger production delays. The agricultural sector is also bracing for impact, with retaliatory tariffs from Canada and Mexico targeting U.S. exports of pork, cheese, and fresh produce.
“Uncertainty in global trade underscores the need for businesses to reassess their supply chain strategies and reduce dependency on high-risk regions,” says Donigian. “Businesses must act swiftly to navigate rising costs and supply chain disruptions from potential tariffs and retaliatory measures.”
The consumer goods sector isn’t immune, with Canadian and Chinese tariffs potentially affecting U.S. household appliances, electronics, and furniture markets. While Mexico’s tariffs on energy exports have been temporarily delayed, uncertainty looms over U.S. oil and gas exporters.
Moody’s Supply Chain Industry Practice Leads, Andrei Quinn-Barabanov and Vitaliano Tobruk, warn that U.S. companies sourcing Canadian aluminum may face additional challenges. They suggest suppliers might pivot to more profitable markets overseas, forcing U.S. companies to either increase supplier incentives or raise end-user prices.
“The first practical step is to understand pre- and post-tariffs risk profiles of key suppliers,” the experts emphasize. Their recommended strategy includes implementing robust supplier risk management protocols, leveraging technology for enhanced resilience, and developing comprehensive contingency plans.
Despite the temporary relief from delayed Mexican tariffs, experts stress that companies cannot afford complacency.
“With continued trade volatility, companies that take proactive steps now will be best positioned to navigate the challenges ahead,” said Donigian.
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