Photo: US Embassy & Consulates in Canada
The United States has officially announced new duties on imported goods from Canada, Mexico and China. This decision could have serious consequences for US companies in various sectors of the economy, from the automotive industry to consumer goods and energy.
Prior to Saturday’s announcement, company executives tried to avoid commenting on the new tariff policy, fearing a confrontation with the Donald Trump administration. However, now, amid a large-scale trade confrontation, such a strategy of silence is becoming impossible, Reuters notes.
“All leaders are shocked by these chaotic and ill-conceived tariffs, which are aimed not at our adversaries but at our closest allies,” said Yale University Professor Jeffrey Sonnenfeld.
Business impact: automotive, metals, retail
Large companies such as Amazon, Ford Motor, Mondelez International and Owens-Illinois are preparing for significant pressure from investors and analysts demanding explanations on the impact of tariffs on their operations.
Despite numerous requests from journalists, most companies have refrained from making official comments. At the same time, trade unions and industry associations are already expressing their position. For example, the largest trade union of industrial workers in the United States, the U.S. Steelworkers, sharply criticised the introduction of duties on Canadian products, as the annual trade turnover between the two countries reaches $1.3 trillion.
“These tariffs will not only affect Canada, they threaten the stability of entire industries on both sides of the border,” said David McCall, President of the U.S. Steelworkers.
Risks to the US economy
The Trump administration has imposed a 25% duty on goods from Canada and Mexico and a 10% duty on imports from China. Analysts see this as the beginning of a large-scale trade confrontation that could have serious consequences for US companies.
Such giants as General Motors and Toyota may be forced to change their production strategy and partially relocate to the US. At the same time, aluminium producers such as Alcoa are calling for a review of their supply chains to reduce the impact of tariffs.
“Construction companies and auto manufacturers should not lose their competitiveness because of new tariffs that only increase the cost of goods and discourage investment in the American workforce,” said Matt Blunt, president of the American Automotive Policy Council, which represents Ford, General Motors and Stellantis.
Experts predict that the tariffs will lead to an increase in consumer prices, although the exact extent of the impact is not yet clear. Some companies may be able to compensate for the losses by optimising production, but small and medium-sized businesses will be hit hardest.
“Americans will pay more for everyday goods”
Increased import costs could hit consumers. Retailers such as Walmart and Target have been fighting inflation for a long time, trying to keep prices down. But now the situation may be getting out of hand.
“As long as these blanket tariffs are in place, Americans will be forced to pay more for basic necessities,” said David French, executive vice president of the National Retail Federation (NRF).
Companies such as household chemicals manufacturer Church & Dwight are already reviewing their production policies. “It’s a volatile situation, and we will respond accordingly,” said the company’s CFO Rick Dirker.
Washington’s decision triggered a chain reaction. Canada, Mexico, and China have already announced that they are preparing to introduce retaliatory measures against US goods. This could further exacerbate the situation and lead to new economic turmoil.
The Trump administration’s trade policy poses serious challenges for both US companies and the global economy. Time will tell whether this strategy will meet the White House’s expectations, but it is already clear that businesses and consumers are preparing for a difficult period.
