Trump’s New Tariffs: Impact on Global Supply Chains & What Professionals Must Know
Companies are reassessing their sourcing, production, and logistics strategies to adapt to the new tariffs.
U.S. President Donald Trump’s 25% tariffs on imports from Mexico and Canada have officially taken effect—an unprecedented move aimed at pressuring America’s top trading partners. The administration justified the decision, citing insufficient efforts by both countries to curb fentanyl trafficking and illegal immigration into the U.S.
Trump has also raised tariffs on all Chinese imports from 10% to 20%, adding to existing duties on hundreds of billions of dollars worth of Chinese goods. He stated that the tariffs were essential to stopping the flow of fentanyl into the United States.
Trump tariffs to shake up Asian manufacturing.
According to Oxford Economics, the Asia-Pacific region is set to face significant economic challenges in the coming year. China’s industrial and construction sectors are expected to slow due to structural weaknesses, with high-tech industries like electronics and semiconductor manufacturing being the most affected. This will make production shift to the neighbouring countries such as Japan, Korea, and Taiwan, while ASEAN nations could capitalize on new opportunities to replace China’s exports to the U.S.
Additionally, some high-tech manufacturing will be reshored to the United States, which will likely slow production growth in the APAC region. This shift is driven by rising labour costs, geopolitical tensions, and the growing need for supply chain resilience.
Moreover, supply chain professionals must recognize that increasing trade barriers will have far-reaching consequences. Stricter tariffs, regulatory restrictions, and geopolitical uncertainties will not only extend supply chains but also cause delays and inefficiencies in global trade. These disruptions will further hinder the seamless transfer of knowledge, technology, and expertise across borders, ultimately leading to less efficient production processes. To mitigate these challenges, businesses must proactively adapt by diversifying sourcing strategies, investing in automation, and strengthening regional supply networks.
While Japan will face targeted tariffs of 7.5% on automotive exports and 10% on base metals, India is expected to remain largely unaffected due to its low dependency on the United States within the APAC region.
What it Means For Africa
For Africa, the trade war presents significant challenges with far-reaching economic implications. The continent risks being caught in the middle of escalating tensions between the United States and China, and to some extent, the European Union. As a rapidly growing region with emerging markets, Africa relies on trade, investment, and infrastructure partnerships with China, the United States, and Europe to drive its development.
A prolonged trade dispute driven by high tariffs could disrupt supply chains, raise import costs, and create uncertainty for African economies that rely on foreign direct investment and export markets. Additionally, any breakdown in economic relations between China and the United States could compel African nations to align with competing economic blocs, such as South America, Mexico, and Canada, potentially straining diplomatic relations and limiting access to crucial trade agreements, financing, and technology transfers.
Trump’s Tariffs Threaten South Africa’s Steel and Aluminium Exports
According to Agoa, Trump’s tariffs are expected to impact South Africa, as his plan includes a 25% tariff on all steel and aluminium imports.
“The US is one of SA’s largest trade partners, dominated by exports from SA to the US. Steel and aluminium account for about 8.5% of what we export to the US, so the 25% tariff will put pressure on those volumes, though they account for 0.3% of all our exports,” Busisiwe Mavuso says in the BLSA weekly newsletter.
“The trade balance favours SA and supports many jobs, especially through high-value-added manufactured goods. Our respective private sectors have close relationships with over 600 American companies active here,” Mavuso says.
“As an organised business, the relationship with the US is top of mind, with jobs and the economy at the centre of our concerns. We are working toward an approach that aims to protect the interests of companies in both countries. But we must also keep our wider international relations in perspective, including many fast-growing markets that provide opportunities for our businesses.”
