Tariff uncertainty and volatility mark administration’s first six months

Tariffs and the uncertainty surrounding them emerged as the biggest policy issue coming out of the first six months of the Trump administration and the new Congress. That was according to a panel of industry leaders and policy experts who gave their views during a recent Conference Board webinar.

“We have seen unprecedented levels of volatility from tariffs and the uncertainty around them,” said Tarang Amin, chairman and CEO of e.l.f. Beauty.

The global cosmetics company leader said his firm has faced tariffs of 25% and up.

“Tariffs are impacting us as a business as well as shaking consumer confidence,” he said. “Tariffs are a tax on the consumer and companies will pass on these costs to the consumer.”

Amin said some of the Trump administration’s tariff policies have changed the way his company has sourced its products. Five years ago, 100% of e.l.f. Beauty’s production came from China. Today, about 70% of its products are made there, with other production shifted to countries such as Vietnam.

“It didn’t have so much to do with tariffs,” he said of the move in production. “It has to do with a rapidly diversifying global business.”

Tariffs: A negative impact on consumer confidence

Aside from tariffs, Amin said his bigger concern is that the majority of Americans live paycheck to paycheck. “That uncertainty is the bigger issue – what does this do to consumer confidence in their ability to purchase?”

Moving supply chains to the U.S. “is incredibly difficult,” he said.

“You can’t just say, ‘I’ll go somewhere else.’  It took us five years to move 30% of our production out of China. We need to look at what's our global business and how will we best support that longer term.”

Greater predictability should be the goal as the U.S. works out trade agreements with its trading partners, Amin said.

“Every CEO I’ve talked to wants fair trade and a level playing field. This gives us the opportunity to move forward,” he said.

“Companies are trying to navigate this moment and the uncertainty of this moment,” said Safiya Ghori-Ahmad, senior director of APCO.

She listed some industries that will be most impacted by tariffs, among them steel and aluminum and the industries that are most dependent on those metals. “The auto industry has been pushing the administration to showcase the impact of tariffs – prices will go up,” she said. Apparel and shoes is another sector that has been vocal about how tariffs will raise prices of those products on American consumers.

Agriculture is a heavily guarded and protected industry in most countries, Ghori-Ahmad said. “Where we see trade deals stalled is where agricultural products are concerned.”

As for Trump’s threat of 200% tariffs on pharmaceuticals, Ghori-Ahman said the effect would be “devastating” on the countries that manufacture pharmaceuticals for the U.S. market.

"Supplier relationships are often longstanding relationships that are formed over years. They can’t be upended and shifted overnight,” she said. “But we did see companies diversify their supply chains out of China and into Vietnam, India and Mexico. Companies are trying to figure out what else they can do on how costs will go up and how they will communicate those costs to consumers.”

A wish list for the next 100 days

When asked what they would most like to see the administration do on either the domestic or foreign policy front in the next 100 days, both Amin and Ghori-Ahman said the same thing – address tariffs and uncertainty.

“I want to see complete clarity on tariffs,” Ghori-Ahman said. “Tariff uncertainty created uncertainty for companies and chaos around the world.”

The top issue on Amin’s wish list also is certainty around tariffs. But he had one more wish.

“Less chaos,” he said. “We lived through a pretty chaotic six months, which has made everything harder.”

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