In an effort to counter the impact of President Donald Trump's decision to impose a 25% tariff on steel and aluminum, executives in various industries reliant on these imports are taking urgent measures to mitigate the associated costs. This move, announced on Monday, is expected to take effect in mid-March.
Executives from diverse companies, such as Coca-Cola, Ford, and smaller firms in the aluminum, aerospace, and appliance sectors, anticipate being affected by these tariffs. Ford's CEO, Jim Farley, expressed concerns about the added costs and disruption to American businesses, stating that it has introduced "a lot of chaos."
The uncertainty surrounding potential exemptions and the looming implementation of these tariffs have left many stakeholders unsettled. Companies are struggling to plan for the future, with manufacturing entities finding it particularly challenging to navigate the evolving trade landscape.
Businesses are exploring various strategies, including altering import mixes or passing on increased costs to consumers. For instance, Coca-Cola mentioned the possibility of shifting to more plastic bottles if aluminum can prices rise, while Coty has ramped up U.S. inventories and fragrance production in response.
Auto manufacturers like Ford and General Motors are considering inventory adjustments to brace for potential tariffs on imports from Mexico, Canada, and other countries. Notably, if suppliers raise prices due to tariffs, it could result in higher car prices for consumers.
There are contrasting views within the industry regarding the tariffs, with some companies like Century Aluminum supporting them for protecting national security and promoting domestic production. Conversely, others stress the need for a long-term strategy to bolster U.S. aluminum manufacturing to achieve self-sufficiency.
The current climate of uncertainty has led to stockpiling by businesses and fluctuations in shipping and truck traffic. Executives are closely monitoring developments and adapting their strategies to navigate the challenges posed by the tariff measures.