The on-again, off-again nature of tariffs levied by the Trump administration has put brands and retailers in a holding pattern when it comes to supply chain planning, according to a top thought leader in logistics.
“If you think that there are going to be changes, you’re kind of paralyzed,” said Ryan Petersen, CEO and founder of Flexport on an episode of the Logan Bartlett Show podcast. “That’s a lot of what brands and companies are experiencing right now. They don’t know what the future is going to hold.”
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While Petersen said that companies were always expecting added tariffs on Chinese goods at some level—that number amounted to an additional 20 percent duties—the conversations changed after 25 percent tariffs were placed on Canada and Mexico, before being delayed to April 2.
“All bets are off,” Petersen said, noting that Flexport clients that used to import goods from countries like Vietnam to derisk from China can no longer see that option as a safe haven from tariffs.
“The moment they put tariffs on Mexico and Canada, I think that logic has got to go out of the window and you should expect tariffs can come for any country,” he said.
One of the endgame scenarios for the Trump tariffs is the mass return of manufacturing and production to American soil. But Petersen, who described himself as “very anti-tariff” during the podcast, said that such a push is unlikely to be the primary driver of such a dramatic shift.
“They’re probably going to have to devalue the dollar,” said Petersen. “Right now, the dollar is just so strong that we can just import stuff and the amount of tariffs you would need to overcome that is probably higher than is what’s realistic. They have to change the dynamics of the U.S. dollar so that it’s just more expensive to buy things abroad and therefore cheaper to make things here.”
Petersen isn’t completely against tariffs, calling reciprocal tariffs a “reasonable approach” if deployed in the right situation.
“If you’re doing free trade and the other guy is throwing up huge tariffs on you, that’s just bad negotiating policy,” Petersen said. “That may result in lower tariffs on both sides, because what matters to them, more importing like taxing the small amount of U.S. imports or accessing our markets?”
Alongside the tariffs, U.S. importers have had to endure the brief chaos in which the duty-free de minimis provision was axed, before being reinstated just four days later. Much of the speculation behind the about-face was tied to concerns about package pileups as customs officers would be ill-equipped to process and inspect a flurry of goods that didn’t previously require the attention.