Trump’s ‘Reciprocal’ Tariffs Have Arrived. What Do Supply Chain Experts Expect Next?
U.S. reciprocal tariffs took effect for dozens of countries on Aug. 7, after their implementation was postponed multiple times to allow for more time for trade negotiations.
Only a handful of nations have struck deals with the Trump administration to lower their originally threatened reciprocal tariff rate, leaving many to wonder how these heightened levies, with rates as high as 41%, will impact businesses and the economy.
“The administration has made clear that tariffs are a weapon of choice for a wide variety of actions,” from reshoring, to improving national security, to putting political pressure on other nations and countering unfair trade practices, says John Lash, group vice president of product strategy at supply chain software platform e2open.
“Recent executive orders imposing tariffs to pressure foreign nations—like a 40% tariff on Brazil in response to the domestic prosecution of a former president, a 25% tax on any country buying oil from Venezuela or the latest threat against India for purchasing Russian oil – have pushed boundaries well beyond any prior administration,” he adds.
With the aggressive and complex tariff strategy causing global concerns, IndustryWeek asked several supply chain experts for their insights into the recent trade deals and newly increased duties.
On the positive side, the fact that the reciprocal tariffs are in place and no longer a moving target creates “a more stable planning environment for procurement and supply chain leaders, even if that baseline includes higher costs,” says Matt Lekstutis, director of North America at procurement and supply chain consultancy Efficio. “Businesses now have more confidence to move forward with retooling supply chains, optimizing sourcing and locking in resilience strategies.”
The tariffs also “introduce complexity into global trade dynamics and can indirectly fuel inflation by increasing freight and production costs,” he adds.
Companies and Consumers
Despite the advantage of a more stable trade environment for now, the overall sentiment among supply chain leaders seems to be cautious, with experts highlighting a number of negative effects like significant supply chain disruptions and higher costs for consumers.
“U.S. retailers and manufacturers importing goods or components now have 15%-40% higher input costs,” observes Lash. “Most of these costs are likely to be passed along to American consumers.”
Companies forced to absorb costs, he adds, face “options to lower margins, discontinue product lines that are no longer profitable, reduce headcount to offset costs or close shop and go out of business.”
Continued Negotiations
Although the administration was unable to follow through on its “90 deals in 90 days” goal of hands-on tariff negotiations with other countries, supply chain experts see good potential for trade deal negotiations to continue.
“We see this happening every day, most recently with Switzerland,” says Kit Conklin, senior vice president of risk and compliance at global supply chain AI company Exiger. “It's important to note, though, that tariffs are just one aspect of the trade deals—other issues like investment into the U.S. and market access for American companies are also in play.”
Lash observes that the prospect of 30-40% tariffs is definitely an attention getter that “has brought nations to the bargaining table … Making a deal to limit short-term economic harm is especially important for countries that rely heavily on U.S. markets for exports.”
Yet the back-and-forth nature of the tariffs could also be driving nations away from the chaos by friendshoring or nearshoring.
“These reciprocal tariffs could incentivize certain countries to negotiate trade deals to avoid being caught in a tit-for-tat tariff cycle,” says Lekstutis. “That said, the politically fragile nature of the current agreement and the vagueness of enforcement terms especially around EU obligations may deter some partners from pursuing deeper agreements with the U.S. unless there is long-term clarity and mutual benefit.”
Will Reshoring Happen?
As to whether higher levies will strengthen the U.S. manufacturing industry, one of the administration’s main goals, expert opinions tend to lean toward skepticism.
“In many cases, even with increased tariffs, it’s still cheaper to import. Extreme tariffs are likely seen as short-term lever for negotiation vs. a long-term policy,” says Brian Pacula, supply chain partner at digital services firm West Monroe.
Lash takes a wait-and-see approach. “While tariffs are imposed at the stroke of a pen, building new factories takes years, costs billions of dollars and requires long-term certainty,” he says. “Many nations are committing to invest in the U.S. as part of a trade deal for more favorable tariff rates. Will the companies actually spending that capital have sufficient confidence to make these investments? Just how enforceable these commitments are is yet to be seen.”
Conklin adds that the widespread manufacturing of some products just isn’t completely plausible yet for U.S. industry. “In some cases, the domestic infrastructure required to fully support production and manufacturing is still under development. For example, building semiconductor fabrication facilities takes years and requires specialized expertise, equipment and a secure pipeline of critical materials.”
What Next?
With only a small number of trade deals made, the newly implemented reciprocal tariffs and rapidly changing conditions will likely keep global supply chain leaders on their toes.
“While the current agreement averts a hot trade war for now, it is best viewed as a short-term working baseline rather than a long-term fix,” says Lekstutis. “Many in the industry view it as politically fragile, with vague terms and unresolved sector carve-outs. Supply chain professionals are already treating the next 60–90 days as a critical window for preemptive planning, realignment and risk governance, suggesting they expect revisions or disputes down the line.”
