The Tariffs are Here: Now What?

60 seconds after midnight US tariffs on thousands of Chinese products more than doubled. How is this going to affect your business?

Costs are going to go up across the board. The supply chains of virtually every industry cross through China at some point. It’s impossible to get away from it. Even if you are a low-tech company, China played a role in producing the goods and services you use or that your suppliers use.

Two simple non-tech examples: if you have employees you reimburse for mileage you are likely to see the reimbursement rise due to increased repair costs, due to increased part prices sourced from China. (Crude oil has also had upward pressure put on it from tariffs). Second, the tariffs hit on materials such as aluminum and copper increase costs for any industry that depends on them as a core component. That includes oil, manufacturing and construction for starters. The result will be increased expenses for anyone with an office building.

Finally, the tech sector depends heavily on China. From computer chips to memory, to the raw materials used to create these, mass amounts of tech manufacturing happens in China. Even low-tech companies will feel the pinch as the underlying costs for vendors they depend on (phones, email) see their costs go up and adjust prices accordingly. For organizations with larger tech initiatives, such as replacing aging Windows 7 machines, the cost will increase.

At JM Addington Technology Solutions we don’t expect to see price increases immediately but rather ramping up over the rest of the year. The threat of tariffs are not new so a lot of companies have had time to either adjust prices or deal with increased costs already. However, there has been and is broad market expectations that a deal will get reached. The longer that takes to happen, the more you will see your costs increase,