Running a business with international transactions in Europe, South America, Mexico, or Canada and facing potential tariffs may not be too concerning. This is because new rates will likely be negotiated by the Trump administration, possibly reducing current rates. Although these negotiations can be challenging, these countries heavily rely on U.S. consumers. Therefore, they are more likely to settle and reach agreements.

However, if your business heavily relies on Chinese products, it presents a much greater challenge. The tariff discussions primarily revolve around China. This focus is not surprising for those following President Trump, as he has been consistent in targeting China.

During 2018, the Trump administration increased tariffs on significant Chinese products, sparking retaliatory tariffs from China. The situation escalated with various economic damages as a result. The pandemic diverted attention, leading to the lifting of many tariffs. However, with Trump returning to the scene, ongoing grievances with China are resurfacing, extending beyond tariff issues.

In 2018, Trump made substantial demands targeting China, including deficit reduction and trade rule changes. These demands aimed at tackling economic matters and technology access disparities between the two countries. Trump’s strategy emphasizes the U.S. position in the deficit and holds China accountable for resolving trade imbalances.

Presently, the trade deficit with China continues to expand, highlighting the imbalance. Notably, China’s economy has slowed, making it more reliant on American consumers. However, deteriorating aspects in China, including economic, political, and reputational concerns, have shifted dynamics against its favor. As Trump remains adamant on challenging China economically, businesses reliant on Chinese suppliers face impending challenges, with the need to adjust to the changing landscape for sustainable business operations.