In the last months executives of companies have affirmed that they adopt an attitude to wait and see what happens with the tariff threats of President Donald Trump. However, the first earnings reports of the fourth quarter show that many did not.
Automobile manufacturers such as General Motors and Mercedes, French producers of Coñac and Italian companies of Parmesan cheese and foamy wine have accelerated their shipments to the United States. At the same time, raw material buyers have increased the purchase of steel, aluminum and soybeans.
“We see that companies are advancing their imports to the US,” said Patrick Lepperhoff, managing director of the supply chain consultant invested in Colonia.
“They have modeled scenarios on how much they could be affected by tariffs and, in general terms, they have decided to import volumes to be covered for a certain time,” he added.
Even before Trump returned to office this month, uncertainty motivated companies to accelerate their shipments. The US trade deficit shot at a record of 122 billion dollars in December, since imports of goods increased 4% and exports fell 4.5%.
Executives have described Reuters and in telephone conferences the challenges of an increasingly uncertain environment due to changes in Trump’s plans on tariffs, which could alter world trade and bring some companies to transfer their production to the United States.
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PACSUN, a casual clothing retailer for teenagers and young adults, is one of the many companies that are importing merchandise.
The executive director, Brieane Olson, told Reuters that the private company advanced part of its first quarter sales as part of a contingency plan. It also has a “work group on tariffs” that meets twice a week to work with suppliers on this topic.
“PACSUN has a very proactive plan to help our suppliers and vendors in the best way,” said Olson.
Trump’s threats have varied from possible tariffs from 100% to 200% on cars from Mexico to universal rates over all imported goods.
A proof of his determination will arrive on Saturday, when the president of the US has said that he plans to introduce tariffs on imports from his neighbors and main commercial partners, Mexico and Canada.
Numerous sectors could be affected. In 2024, EU imported around 844 billion dollars in goods in Canada and Mexico, which represents approximately 28% of all its imports, according to data from the US government.
Preparation efforts have already benefited some companies. The German chemical company Lanxess said that its fourth quarter earnings were significantly better than expected due to early purchases of US customers.
Italian producers have sent more reggian Parmigian cheese to the US, according to the commercial association of the industry, which hopes to obtain exemptions for their premium products.
In general, US imports of 20 -foot containers increased in November and December, reaching its highest point since 2021.
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Merchants in Tampa and Houston bought South Korea steel, Japan and Turkey anticipating tariffs on the first day of Trump’s mandate, said José Severin, from the raw material supply chain consultant The Mercury Group. This left large amounts of steel in stores and ports, causing bottlenecks and increasing costs.
“We could redirect the supply of our foundations in Canada to Europe. While it is an advantage to have this option, it is certainly not a benefit for our clients and supply chains like them, ”said Alcoa executive director William Opperinger, investors earlier this month.
Assembly line
The automotive sector is particularly vulnerable to tariff of 1994.
General Motors accelerated shipments from its facilities in those countries during the fourth quarter.
“Every delivery we can do before tariffs are applied is better than staying with stored inventory,” said GM financial director Paul Jacobson.
All Toyota Tacoma models sold in the US – more than 200,000 units a year – come from Mexico. A source close to the company said before the November election that tariffs could lead Toyota to transfer production to their assembly plant in San Antonio, Texas.
Almost 40% of the profits of the S&P 500 come from abroad, according to LSE data, which show that the sectors with the highest exposure to foreign trade – technology, discretionary and industrial consumer goods – have been the ones that have discussed the most about chains of chains of Supply and relocation of production.
Accumulating dust?
Some companies are not advancing orders without being certain about demand.
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The private manufacturer Mga Entertainment has not sent extra product, according to its executive director, Isaac Larian, who claimed to have voted for Trump. Its key sales season has already ended and storing extra inventory is expensive.
“The toys business is like fashion. Change all the time, ”said Larian. “We cannot buy so much inventory just for anticipating tariffs.”
The beverage industry faces a similar situation, since sales in the sector have fallen. Some companies were also affected in the past when they stored product at the beginning of Trump’s first mandate.
When in 2019 Trump threatened champagne tariff Champagne was excluded from tariffs.
That experience means that I would only buy extra inventory if the tariffs were confirmed.
OBC managed to liquidate excess inventory during the pandemic, when supply problems prevented the great producers of Champagne from fulfilling the demand.
“We were lucky,” said Buono.
With Reuters information
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