Trump and 2025: Getting Ready For The Supply Chain Changes

As President-elect Donald Trump takes office, companies face a period of uncertainty and change. With tariffs poised to become a major economic tool once again, businesses must navigate shifting trade policies with resilience and foresight. Let’s reflect on the lessons learned from recent developments and Trump’s first term to better prepare for what lies ahead.

Trump’s Tariff Plans: What to Expect

One of the first major economic actions expected from Trump is a series of aggressive tariff hikes:

• 25% tariffs on all imports.
• 10% additional tariffs on Chinese goods
• 25% tariffs on all steel and aluminum imports (with no exemptions)

These policies mirror his first-term strategy, which led to a prolonged trade war with China and disrupted supply chains worldwide. Given Trump’s recent statements, the tariff list may expand to include semiconductors, automobiles, and pharmaceuticals under a “reciprocal” trade approach—matching the import duties that other countries place on U.S. goods. Planning for these fluctuating costs with your drayage should be an important step of your supply chain principles.

Immediate Business Responses: Frontloading Inventory

With the new tariffs coming into effect within weeks, many companies are rushing to stockpile inventory before the added costs take hold. This short-term tactic helps businesses avoid immediate price increases, but it is not a sustainable solution—especially for industries dealing with perishable goods like food. Experts caution against overcommitting resources without clear policy details, advising firms to stay agile and adaptable. Plan your drayage movement and routes with your carrier to avoid unnecessary delays and costs.

Long-Term Adjustments: Diversifying Supply Chains

• Companies are accelerating their shift away from China to reduce tariff risks, a trend that began during Trump’s first term.
• Key alternative manufacturing hubs include Vietnam, India, Turkey, Poland, and Mexico.
• Challenges of relocating supply chains:
  • Transitioning can take five years or more.
  • Regulatory hurdles and compliance issues increase complexity.
  • Higher costs and loss of bulk pricing advantages impact profitability.
• For companies unable to relocate sourcing, renegotiating supplier contracts is a growing strategy.

For those unable to relocate their sourcing, renegotiating supplier contracts has become a viable alternative. Some firms are sharing the tariff burden with foreign producers, pushing suppliers to absorb some of the increased costs rather than passing them entirely to consumers.

Strengthening Supply Chain Visibility

Understanding the precise origins of raw materials is now more critical than ever. Companies must audit their supply chains down to the source—whether tracking specific mines for minerals or identifying oil refineries for plastic production. Additionally, reclassifying product categories could help businesses predict tariff impacts more accurately and explore potential workarounds.

One such workaround is Foreign-Trade Zones (FTZs), which allow goods to enter the U.S. without being immediately subject to import duties. Businesses can use FTZs to defer, reduce, or even eliminate certain tariffs by exporting products directly from these zones rather than bringing them into domestic circulation.

Domestic Sourcing: A Limited Solution

Trump has long argued that tariffs will push companies to bring manufacturing back to the U.S. However, experts remain skeptical about whether domestic production can fully replace foreign suppliers.

• U.S. manufacturing capacity is limited, making it unrealistic for industries to meet demand purely with local production.
• Many raw materials still originate abroad, meaning that tariffs will continue to influence costs, even if final assembly moves stateside.

While reshoring efforts have gained traction in recent years, businesses must weigh the logistical, regulatory, and financial challenges of making a large-scale transition.

Seeking Exemptions and Advocating for Policy Relief

There is hope that exemptions may be available for certain products and industries. However, businesses must act fast—exemption requests must be filed before the March 31, 2025 deadline.

Additionally, companies with strong government relationships will have an edge in navigating these policies. Engaging with trade groups, lobbying organizations, and policymakers could be crucial in securing exemptions or influencing adjustments to the tariff structure.

The Big Picture: Flexibility is Key

Rather than reacting to every new tariff announcement, businesses must focus on long-term resilience. Scenario planning, diversified supplier networks, and increased supply chain transparency will be essential in handling unpredictable trade shifts.

Build flexibility into your supply chain. Because the key to thriving in a volatile trade landscape is adaptability. By staying ahead of industry trends, optimizing drayage efficiency, and offering tailored solutions, BYC can help businesses navigate the evolving supply chain landscape with confidence and clarity.