Unless you’ve been living under a rock, you know that major changes in US trade policy are roiling markets and causing major hand wringing by business leaders world-wide. In my last blog on tariffs, I didn’t make a prediction about universal tariffs, but I did speculate that Trump would raise tariffs on China and tariffs on Canada and Mexico would either be short lived or foregone altogether if the US’s neighbors to the north and south met Trump’s demands on boarder security. Since then, Trump charged forward with both universal tariffs and new targeted tariffs on China, causing massive impacts on the world economy. To stem the market disruption, Trump then announced a 90-day pause to renegotiate trade deals.  

This update takes a closer look at the current state of tariffs, the impacts on various companies and nations, and what business leaders, particularly supply chain leaders, sourcing managers, and business executives, need to consider as they move forward. 

A Shift in Tariff Policy  

President Trump’s reciprocal tariffs initially included a 10% baseline import tax on goods from 90 nations, with some countries facing additional tariffs as high as 49%. For instance: 

• Imports from China now face a combined tax rate of over 100%, factoring in previously existing tariffs and new reciprocal fees – with threats of more tariffs to come.  

• Nations like Vietnam, Cambodia, and Taiwan would bear the brunt of these measures, with tariffs ranging from 46% to 49%.  

• Conversely, Mexico has largely been spared, retaining its position as one of the most advantageous manufacturing hubs for U.S.-bound production—for now.  

The rationale for these tariffs, according to the Trump administration, is twofold: 

1. To eliminate trade imbalances by matching the restrictive tariffs imposed by other countries on U.S. goods.  

2. To encourage domestic manufacturing and reduce reliance on foreign imports.  

However, as discussions evolve and retaliatory actions escalate, the question remains—which companies suffer the most and could some companies benefit? 

Winners and Losers of the New Tariff Landscape  

Any change in federal policy generally creates winners and losers. At the moment, here is how things are playing out. 

The Winners  

• Companies Manufacturing in Mexico  

Thanks to the lack of additional tariffs on Mexico, organizations with supply chains routed through this country are positioned at a competitive advantage. Mexico’s proximity to the U.S., cost-effective labor, and strong logistics network all strengthen its appeal. For industries like automotive, agriculture, and electronics, this is a golden opportunity to edge out competitors operating in heavily tariffed regions.  

• Domestic Manufacturers  

With high tariffs making imports less competitive, U.S.-based manufacturers focusing on high-demand sectors like steel, agriculture, and machinery may see greater demand for their products.  

The Losers  

• Companies with Shifted Supply Chains  

Many companies had relocated production from China to nations such as Vietnam, Cambodia, and Taiwan during the previous administration’s trade disputes to avoid high tariffs. These efforts, while substantial, have now been derailed. Companies operating in these countries now face exorbitant import fees and must reevaluate their strategies yet again.  

• Global Supply Chain Operators  

Businesses heavily dependent on Asian supply chains face major disruptions as exorbitantly high tariffs inflate costs. Inflationary pressures and retaliatory measures by other nations further complicate matters, increasing uncertainty and threatening economic stability.  

The Big Picture: Ongoing Negotiations and Uncertain Outcomes  

It’s important to remember that this is a dynamic situation and more changes are likely. Negotiations between the U.S. and affected countries are ongoing, with some nations, opting for a more measured approach to counter tariffs rather than immediate, aggressive retaliation. While some tariffs might stick long-term, others could be rolled back as part of future trade agreements. 

For businesses, this underscores two things: 

1. Agility and Foresight Are Key  

Companies must prepare for an evolving landscape, leveraging data and predictive analytics to stay ahead of potential policy changes.  

2. Geography Now Matters More Than Ever  

Decisions around nearshoring and reshaping supply chains—particularly to lower-risk regions like Mexico—are critical to maintaining resilience. 

What Businesses Should Do Now  

The path forward in this volatile trade landscape requires proactive planning and strategic decision-making. Here are three steps to help your organization prepare: 

1. Reassess Your Supply Chain  

Conduct a thorough audit of your suppliers and manufacturing operations. If your business is exposed to regions facing high tariffs, investigate alternative sourcing options or nearshoring opportunities within Mexico or other low-risk regions. 

2. Prepare for Cost Adjustments  

With new tariffs driving up the prices of imported goods, inflationary pressures are inevitable. Build flexible pricing models into your strategies to absorb these changes without losing your competitive edge. Consider adding a tariff surcharge instead of increasing your prices directly. 

3. Stay Engaged with Policy Developments  

Today’s trade policies can shift rapidly, with both political and economic factors influencing outcomes. Staying informed will ensure your business can adapt and respond effectively—and even uncover opportunities to thrive. 

The Road Ahead  

The full impact of Trump’s reciprocal tariffs is still unfolding, and there’s little certainty about which policies will endure. What remains clear is that businesses capable of adapting to these shifting dynamics will emerge stronger. Whether it’s pivoting supply chains, leveraging new regional advantages, or staying ahead of the negotiations, opportunities exist for those who prepare. 

At OMI, we’ve already embraced this proactive approach. By investing in our manufacturing ecosystem in Mexico and incorporating flexible solutions into our supply chain strategies, we’ve created a model for resilience that protects both us and our clients.  

Are you prepared to meet these challenges? Contact us to learn how OMI can help your business maximize stability and success amidst evolving trade realities.