I have been contacted by two suppliers in the last few days with notice that their prices are increasing as a result of tariffs imposed y the Trump administration.
Despite the claims by Trump, tariffs are paid by the importer, who passes them on in a higher cost of goods. One supplier has advised there will be price increases they are yet to calculate while another US based supplier has written with details on an increase to apply from April 1.
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Given the routes some goods go through, priced paid in Australia by some suppliers will increase. While some suppliers will re-route goods to avoid the US imposed tariff, for others this will be a challenge.
The reality is that the tariff moves by the Trump administration are having knock-on affects on manufacturing around the world, leading to significant supply chain disruption.
The Trump tariff move has been made, according to him, to stimulate manufacturing in the US. For plenty of these goods Americans will need to be happy paying significantly higher costs due to higher local manufacturing costs if manufacturing is moved to the US for even the log wages paid in the US are considerably higher than in China, for example. Some US suppliers have noted already, the tariffs are lower in cost than US based manufacturing.
Plenty of economists have explained the folly of imposing tariffs, that the additional cost is borne by US consumers and not the exporting country.
A consequence of the tariff move is more people becoming aware of where what they buy is manufactured. You only need to see some of the news out of Canada in the last couple of weeks to see the extent of the own-goal by the US. I think there is good opportunity here for a more nuanced buy local approach.
While the current federal government in Australia has said it will not impose tariffs on the US in retaliation, trade into our country is already caught up in the US moves. It’s messy and expensive.
In my own case we are making alternative arrangements in at least one instance.
The situation is fluid as we have seen in recent weeks. None of this helps with business planning.
Ugh.