An analysis by the JPMorganChase Institute indicates that U.S. employers will bear a direct cost of $82.3 billion from President Donald Trump’s current tariff plans.
This substantial amount could potentially lead companies to implement price increases, layoffs, hiring freezes, or reductions in profit margins.
The study specifically assesses businesses with annual revenues between $10 million and $1 billion, a segment that employs nearly a third of private-sector workers in the U.S.
Many of these firms are heavily reliant on imports from countries such as China, India, and Thailand, making them particularly susceptible to the impact of increased import taxes overseen by the Republican president.
As the deadline approaches for Trump to set the tariff rates on goods from various countries, the analysis also underscores the trade-offs associated with the tariffs, challenging Trump’s assertion that foreign manufacturers would shoulder the costs instead of U.S. companies.
While the tariffs initiated by Trump have not yet led to a surge in overall inflation, prominent firms like Amazon, Costco, Walmart, and Williams-Sonoma have managed to delay potential adverse effects by bolstering their inventories ahead of the tax implementation.
Current tariff rates were set following a 90-day negotiating period, during which most imports faced a baseline tariff of 10%.
China, Mexico, and Canada are subject to elevated rates, with steel and aluminum facing distinct tariffs of 50%.
Had the original tariffs imposed on April 2 remained in effect, businesses evaluated in the JPMorganChase Institute analysis would have faced even higher costs of $187.6 billion.
Under the revised rates, the $82.3 billion translates to an average cost of approximately $2,080 for each employee, accounting for about 3.1% of the average annual payroll.
It’s noteworthy that these averages also include firms that do not import goods.
President Trump, when asked about the progress of trade discussions, simply remarked, “Everything’s going well.”
He has indicated that he intends to finalize tariff rates due to the complexities involved in negotiations with multiple countries.
Currently, only the United Kingdom has formalized a trade framework with the Trump administration, while negotiations appear to be advancing with Vietnam and India.
Trump recently announced a deal with Vietnam, indicating that Vietnam will impose a 20% tariff on all goods exported to the U.S. and a 40% tariff on any goods transshipped through Vietnam, often to circumvent tariffs on Chinese products.
In exchange, Trump stated that Vietnam will offer the U.S. “TOTAL ACCESS” to its market, where American products can enter without tariffs.
He expressed optimism that SUVs would be a valuable addition to Vietnam’s product offerings.
A growing body of analysis indicates that rising inflation could become a reality, with Goldman Sachs predicting that companies may pass on 60% of their tariff costs to consumers.
The Atlanta Federal Reserve’s business survey suggests that companies could transfer roughly half of the costs from either a 10% or 25% tariff to consumers without significantly reducing demand.
While the findings from the JPMorganChase Institute imply that tariffs could encourage domestic manufacturers to enhance their roles as suppliers, there remains an urgent need for companies to prepare for a variety of possible outcomes.
Given that wholesalers and retailers typically operate on narrow profit margins, they may have no choice but to transfer some of the tariffs’ costs onto their customers.
The future outlook regarding the tariffs is highly uncertain.
Negotiations with Canada were halted before being resumed after the country abandoned plans to tax digital services.
Moreover, Trump has issued threats of additional tariffs on Japan unless the country increases its rice purchases from the U.S.
Treasury Secretary Scott Bessent commented on Fox News Channel that the concessions made during trade talks have impressed veteran officials from the Office of the U.S. Trade Representative and other agencies.
He noted that the Trump administration plans to outline the specifics of upcoming trade deals next week, emphasizing the tax cuts package that recently passed in the Senate.
Trump aims to offset the costs of this multitrillion-dollar package with revenue generated from tariffs.
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