Earlier this year, we posted our 2019 Corporate Compliance & Litigation Outlook. In the post, we said the following with respect to tariffs:
2018 was the year of the “tariff” for manufacturers. You could not read a manufacturing news story without mention of it. There is a lot of hype around tariffs and other trade regulations. Some companies have been able to absorb the costs by passing it on to their customers and others have not. In 2019, I expect that these discussions will continue.
Today, Industry Week posted a story from Bloomberg entitled “A Year On, Trump’s Metals Tariffs Have More Losers Than Winners.” The key points in the story are that while U.S. steelmakers have seen profits, U.S. producers of aluminum have not. And, the story references large losses by buyers of steel and aluminum as examples of how U.S. companies have lost due to the tariffs. While the Bloomberg story focuses on large companies (such as Caterpillar) there is no discussion of how tariffs have impacted small to medium sized companies within the supply chain.
Recently, I hosted a manufacturing executives’ dinner for privately held manufacturers. Notably, when the subject of tariffs came up, many of the CEOs indicated that either the tariffs were not impacting their sub-sector of the marketplace and/or that the costs were being passed on to the customer. As a result, I think it is safe to say that the hype about tariffs will continue, but I think it is too early to make generalized predictions about how tariffs are impacting all manufacturers.