Betting markets say it’s much likelier than not that the US supreme court will follow last week’s hearing by ruling against at least parts of Donald Trump’s tariff policies. Would the president risk a constitutional crisis by refusing to comply? Or try to use other policy mechanisms to keep at least some tariffs in place? If the court orders the refund of hundreds of billions of dollars of collected tariffs, would he let the money be repaid and how soon? Trump’s prediction that the “economy will go to hell” may be too alarmist, but no one should expect a smooth ride.
What can companies selling to the US do to prepare? Certainly, ensure those unfortunate junior employees deployed on 24/7 monitoring of his presidential social media posts stay focused. What else?
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An informal survey of chief executives by Eurasia Group, a political risk consultancy, has identified several clear C-Suite trends. Firms have been reconfiguring supply chains, including reevaluating the countries they rely on for sourcing and increasing manufacturing close to where they sell. The “China +N” strategy of channelling production to non-US markets and diversifying supply sources for the US is becoming popular. Tariff pressure is adding to the corporate focus on using AI to reduce costs. Even so, price rises of 3-15% in the US are likely in the next few months as opportunities for mitigation and inventories decline.
However, says Eurasia Group, the US remains a “highly attractive market” for many companies and chief executives are reluctant to talk publicly about the impact of tariffs as this carries “significant political, public affairs and retaliatory risks”. Could the supreme court ruling against Trump be enough to embolden them to speak up?
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