Detroit City Wire

In a recent event aimed at small business owners, leaders from the U.S. Chamber of Commerce provided updates on the current tariff situation and its implications for businesses. Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, alongside John Murphy, Senior Vice President, Head of International, laid out the landscape of trade tariffs.

Bradley highlighted how the current tariffs differ from previous ones. "We’re used to some level of tariffs in history and commerce," he noted. He pointed out that the latest tariffs under the International Emergency Economic Powers Act (IEEPA) offer flexibility for the administration as they do not require public comment or notice before changes are enacted.

He also pointed to the uncertainty these tariffs bring, creating practical challenges for small businesses. Bradley mentioned issues such as suspended deliveries from foreign suppliers, customs bonds not covering imports, and contracts becoming subject to unexpected tariff increases. Bradley advised businesses to review contracts for clauses allowing adjustments due to tariffs or supply chain delays.

Murphy provided specifics on recent tariffs, stating they come in multiple waves. These include 25% tariffs on goods from Canada and Mexico, high duties on Chinese imports, and 25% tariffs on steel and aluminum. The introduction of "reciprocal tariffs" affects many imported goods globally, with significant percentages on goods from countries like the European Union, Japan, and Southeast Asia.

Some tariffs have been paused, but the 10% baseline remains in effect. The economic impact includes increased costs for consumers, decreased competitiveness for U.S. manufacturers, and potential international retaliation. "About half of everything that U.S. manufacturers make is actually for export markets," Murphy explained, highlighting the difficulty U.S. companies face when competing abroad under such conditions.

The unpredictable nature of these tariffs stems from the expedited manner they're implemented, without the usual processes of notice and public comment. Despite the uncertainties, the administration signals the 10% tariff will persist. Further tariffs are in process, potentially impacting sectors such as lumber and pharmaceuticals.

Finally, there is a possibility of new bilateral trade agreements during this period of tariff pauses, though historically such agreements take years to finalize.