In the wake of US President-Elect Donald Trump’s latest vocal assertions regarding upcoming international tariffs, barriers to international trade have swiftly risen to the top of supply chain leaders’ lists of concerns headed into 2025. A new report released by logistics SaaS company Descartes Systems Group found that close to half (48%) of supply chain leaders surveyed identified rising tariffs and trade barriers as their top concern. This was closely followed by supply chain disruptions at 45% and geopolitical instability at 41%.
Jackson Wood, Director, Industry Strategy at Descartes, noted that “With the potential for the incoming US administration to impose new and additional tariffs on a wide variety of goods and countries of origin, US importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”
Trump promises tariffs will define the outset of his second presidency
At the end of November, Donald Trump made repeated posts on his social media platform Truth Social promising that, on day one of his administration — in addition to deporting large numbers of allegedly illegal immigrants — he would impose significant and broad new tariffs on goods entering US ports.
Trump has claimed he will impose a 25% levy on all goods entering the US from Mexico, and Canada on his first day in office. The move will, Trump claims, somehow help crack down on immigration and illegal drug smuggling. In addition to the blanket 25% tariff on all products, Trump also said that China would be subject to an additional 10% “above any additional tariffs.” While campaigning earlier this year, Trump floated the possibility of tariffs as high as 60% on all Chinese-manufactured goods.
Tariffs provoke uncertainty as supply chains race to diversify
The potential for tariffs to eat into profit margins for western companies, which in turn will pass that cost on to consumers, is creating a scramble among companies of all sizes to place orders quickly and for supply chain leaders to rapidly reshore what elements of their supply chains they can. Descartes’ research found that tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.
A recent report found that various manufacturers in the tech and consumer goods sectors are seeing huge upticks in overseas orders as businesses attempt to secure critical goods ahead of Trump’s inauguration, which also falls around the regional shutdown caused by the Lunar New Year. Affected industries will likely include display panels, IC design, memory, and optical communications.
But beyond short-term overstocking, Descartes notes that a tariff-happy Trump presidency could highlight a newfound necessity for organisations involved in international trade to sharpen their supply chain analytics practices to help build more resilient supply chain networks.
“Evolving tariffs and trade policies are one of a number of complex issues requiring organisations to build more resilience into their supply chains through compliance, technology and strategic planning,” argued Wood.
- Risk & Resilience
- Sourcing & Procurement
