Tariffs Are Poised to Have a Big Impact in 2019
hen running a business, you’ll always run into circumstances that you can’t control — those non-negotiable expenses that come with operating a company. Some of these factors you can plan for; others can arise from seemingly out of nowhere and have a huge impact on your bottom line.
One of the biggest uncontrollable factors that can affect your profit is tariffs. If you’re involved in importing or exporting any kind of goods, you’ll feel the impact of tariffs directly. But even if you only do business domestically, tariffs will play a role in how you do business. Tariffs affect the cost of everything from timber to corn, and the implementation of tariffs causes shockwaves that are felt across industries.
A perfect example of this is the steel industry. A 2018 tariff on imported steel caused U.S. steel manufacturers to see increased earnings. However, these higher steel prices directly affect the automotive and construction industries, which are key components of the United States economy. It also remains to be seen whether these high steel prices will continue in 2019 — early numbers show prices moving down as demand for steel decreases.
One of the most difficult aspects of tariffs is that their status changes almost daily. President Trump has proposed many new tariffs during his time in office, but only some of these have been enacted. Ongoing negotiations with trade partners like China will also have a major influence on current tariffs, especially for the agriculture industry. The ever-changing landscape makes it nearly impossible to prepare for the impact of new tariffs.
A perfect example of this is the steel industry. A 2018 tariff on imported steel caused U.S. steel manufacturers to see increased earnings. However, these higher steel prices directly affect the automotive and construction industries, which are key components of the United States economy.
With an unpredictable element like tariffs in the mix, how can business owners prepare? It will take flexibility and a willingness to be strategic. Our Economic Development Trends Report takes a closer look at tariffs and gives you some ideas on what to expect in 2019.
In addition, minimizing expenses in other areas can help lessen the impact of tariffs. At Ginovus, we are seasoned economic development experts that help companies find sustainable site selection options. Our team will help you find the best market for talent, the best location for your growth trajectory, and will help you procure financial benefits to lower operating costs. In an ever-changing market, details like this can make all the difference. Tariffs are unavoidable, but a smart strategy can keep them from hurting your business permanently.