Preparing for the Future: The Impact of Trump’s Election on Global Trade
On the morning following the election, Rick Muskat found himself facing an urgent challenge. At 4:30 a.m. Beijing time, he reached out to his agent in China, eager to determine how many additional pairs of men’s dress shoes their factory could produce before the upcoming Chinese New Year, which occurs at the end of January. “I told them if they could manufacture an extra 30,000 pairs, we would take that,” shared Mr. Muskat, co-owner of the shoe company Deer Stags, during a conversation on Thursday.
This proactive approach was not spurred by a sudden increase in shoe demand, but rather by the impending threat of significant tariffs on Chinese imports. By stockpiling inventory now, Mr. Muskat believed that his company could effectively sidestep at least a portion of the levies that President-elect Donald J. Trump has indicated he plans to implement upon taking office in January. “We’re going to take whatever they can make,” Mr. Muskat confidently stated.
The election of Mr. Trump is sending ripples through global supply chains, as businesses grapple with his promises to overhaul international trade by imposing higher tariffs on foreign products. Mr. Trump has proposed various plans—including a 10 to 20 percent tax on most imported goods and a staggering 60 percent tariff on products from China—that would elevate the costs American importers face to levels not witnessed in generations.
While much remains uncertain regarding his proposals, including which countries might be targeted beyond China, which products could be exempted, and the timeline for implementation, many executives are not inclined to wait for clarity. They are taking action now to safeguard their interests.
- Some, like Mr. Muskat, are preparing to augment their U.S. warehouses ahead of potential tariff impositions.
- Others are hastening their plans to relocate production out of China.
- Many are reaching out to lobbyists and legal experts in Washington, engaging in discussions about the ramifications of these tariff threats on their operations.
