President Trump is planning to impose 25% tariffs on Mexico and Canada on Saturday, and 10% tariffs on China, making a signature campaign promise and core economic philosophy of his administration reality, with implications for everything from oil to autos to the U.S consumer. But for many companies across the economy, the preparations for a new tariffs war began long ago — well before Trump won the 2024 election.
From large companies in consumer sectors like Walmart, Columbia Sportswear and Lenovo, to a wide range of critical goods for infrastructure projects, importers moved quickly throughout 2024 to get as much product as they could into the U.S.
Conversations with clients on bringing in their products ahead of possible tariffs began as far back as March of last year, says Paul Brashier, vice president of global supply chain at ITS Logistics, with components used in infrastructure projects one of the biggest product segments being brought into the country early.
“A lot of those [infrastructure/construction] budgets were made two or three years ago, and an additional 20% in cost could blow those budgets out of the water,” Brashier said. “So you need to get them in before the tariffs so you can protect the bottom line.”
Solar panels, backup power supply items, racks, and lithium batteries used in data centers were identified by ImportGenius as some additional items being frontloaded.
“When it comes to the impact of tariffs, companies are very granular and they’re very concrete,” said Josh Teitelbaum, senior counsel of Akin, which has been advising his clients to prepare for swiftness with President Trump’s tariff plans and not get bogged down in debates over the efficacy of tariffs as economic policy. “They’re not interested in academic questions about what the principles are and whether or not this specific tool can be theoretically justified to use this particular tariff. They want to know when is it going to impact me and by how much and which products,” said Teitelbaum, who was involved in the structuring of the Trans-Pacific Partnership, a trade deal that President Trump pulled the U.S. out of during his first time in office.
Bringing in products early requires storing them in warehouses, and that incurs additional costs. “Warehouse costs are folded into the price of a product. In the end, the consumer will pay,” Brashier said. In the case of infrastructure project equipment storage, companies absorb the cost, but it is better than paying the tariff, he added.
While the market’s largest companies can afford to bring products in early, a strategy called frontloading, not all companies can afford to do take this approach.
“I don’t know what’ll happen,” said Rick Muskat, president of the family-owned shoe retailer Deer Stags, which imports around two million shoes a year, with about 98% of their men’s and boy’s shoes made in China and sold in Macy’s, Kohl’s, JCPenney, and on Amazon.
Trump has threatened to ultimately impose tariffs of up to 60% on products from China.
Muskat says the company’s “razor-thin margins” prohibit it from frontloading products, and consumers may ultimately have to pay. “We’ll increase our price,” Muskat said. “The retailer will either accept it or won’t accept it. If they accept it, they’ll increase their price. Then the consumer will be left with no other choice. There will be sticker shock.”
Despite claims from President Trump that foreign nations such as China pay for tariffs, Muskat said firms like his bear the brunt of the pain. And he showed CNBC Customs documents to prove it.
“The importer pays the tariff,” Muskat said. “The goods are not released by Customs into the American territory until the importer pays the duty, the tariff, the tax. Customs pulls the amount directly out of our checking account.
Deer Stags most popular men’s shoe sells for $50. If tariffs are imposed, Muskat said that shoe will likely increase to $75. Part of the problem, Muskat explained, is that shoe orders and prices are negotiated approximately seven months in advance of delivery with clients.
While Trump has positioned the tariffs as key to growing the U.S. economy, Muskat sees the trade policy as a threat to his family’s American Dream of owning a business.
“It does keep me up at night,” he said. “We are a family business. We consider the people that work for us, a part of our family. Most of our team has been with us more than 20 years. The only ones who have been with us less than 20 years are the ones we’ve recently hired to replace people who retired. So they were all part of our family. And we care a lot, and we do what we can to help that situation. So it’s concerning what it might do to our family and our broader family.”
Safiya Ghori-Ahmad, lead of the global public affairs practice at Apco, who has been advising clients for months already on how to communicate coming price increases to customers, said the impact will be felt more broadly than it was during Trump’s first term.
“It’s really important that companies talk about the real impact on consumers,” said Ghori-Ahmad. “This time around, the tariffs will be more expansive. In addition to China, we’ll likely see tariffs with our largest trading partners, Mexico and Canada. These tariffs could include food, the auto sector, furniture, and toys from Mexico.”
Even companies that have made moves in recent years to restructure supply chains and manufacturing can’t move fast enough with such complicated operations to avoid significant impacts from tariffs. SurfaceArt, which manufactures tile and tile-related products, moved its operations out of China as a result of the 2018 tariffs and spent millions setting up operations in the U.S., but it still did not have enough capacity to meet demand. SurfaceArt has facilities in Vietnam, Spain and Italy to pick up the additional capacity that can’t be satisfied by U.S. operations.
“The amount of importing that’s necessary to feed the supply for the United States is pretty evident,” Kevin Stupfel, president of the family-owned company. If a blanket tariff is enacted on imports, a move being contemplated by the Trump administration with various federal departments tasked with preparing a report on potential tariffs within the next 60 days, Stupfel says it is not just companies and business owners, but everyone in the U.S. that needs to get ready. “The U.S. simply does not have the ability to manufacture the tile that the U.S. market requires. It would affect everyone you know. It would also affect the cost of construction, the cost of building a home, and remodeling.”