Global Trade Tensions: What Should the Board Know as Tariffs Evolve and Expand?

Tariffs are back – front and center – and disrupting global markets and supply chains. In February and March, the Trump Administration triggered the latest trade war by imposing tariffs on various imports under a 1977 law—the International Emergency Economic Powers Act (IEEPA)—that had never been used to impose tariffs. These tariffs do not discriminate and now impact every trading partner of the U.S. without exception. 

Rising costs are causing organizations to scramble and question their business strategies to manage the significant and immediate cash costs involved with these new tariffs, which are all “above the line” and have to be paid by the U.S. importer of record to U.S. Customs & Border Protection at the time goods are imported. Because other countries have already announced retaliatory tariffs, similar cash costs are facing importers in foreign jurisdictions when they purchase merchandise of U.S. origin.

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