Looking at shifts in trade and tariffs with John Lash, group VP of product strategy, e2open

Editor’s note: This interview was conducted prior to the U.S.-EU trade deal being announced.

With August 1 coming this Friday, global supply chain stakeholders—especially those with operations in nations that have yet to reach new trade deals with the United States—are facing the prospects of a new world order, of sorts, as it relates to the global trade environment, and, by extension supply chain and logistics processes.

The overall outlook remains fluid, in terms of the pace and also significance of deals being made up to the August 1 deadline. John Lash, group VP of product strategy for connected supply chain platform services provider e2open, provided LM with his analysis of what shippers may be in store for when the new tariffs formally take effect.

A Q&A with Lash follows below.

Logistics Management (LM): What is the potential economic impact on affected countries, especially those facing the highest tariff rates?

John Lash:  To consider the harm inflicted on the local economies of exporting countries through the trade war, I’ve done some analysis on what I call the Tariff Pain Factor. This considers the size of the reciprocal tariff set to kick in on August 1, combined with the degree of exports sold to the U.S., and what, if any, portion of trade is protected under an existing free trade agreement. Net-net is that the higher the first two and the lower the last one, the greater the likely pain felt by foreign nations.

Of the countries on the Aug 1 list, Europe, Mexico, and Canada have by far the highest value in dollars of U.S. exports. Even though Mexico and Canada have protections under the USMCA trade agreement, they are both far more reliant on exports to the U.S., roughly four times greater than Europe. Combined with the threatened tariff rates as of Aug 1, Canada comes our as the nation with the greatest pain factor, followed by Cambodia and Mexico. In contrast, Europe is pretty far down the list, with a pain factor of one-third of Canada.

Why is Cambodia ranked at number 2 for pain?  Even though the value of Mexico’s exports is 50 times greater, the high rate of Cambodia’s reciprocal tariff, combined with a sizeable degree of exports and no free trade agreement, puts Cambodia at number two in pain from this stage of the trade war.

Notably, China is not on the August 1 list. The pain factor for China depends largely on where the duty rate lands once the current reprieve runs out on August 12. At 145% reciprocal tariff rates, China’s is ranked number 1 for pain; at 30% it’s below Europe.

LM: Do you think impacted nations might respond diplomatically or through trade negotiations?

Lash: As nations are finding out, it’s challenging to negotiate in good faith when you don’t know what’s really driving the other party. Are tariff threats to protect national security, bring manufacturing to the U.S., pressure nations for deals, or offset the $3 trillion in deficit added by the recent [budget reconciliation] bill? Conflicting objectives, mixed signals, and moving goalposts make it hard for nations to work with their US counterparts.

It seems that the one area of certainty in this trade war is the desire by other nations to establish new trading relationships with each other.  

LM: Do you think the reciprocal tariff pause being pushed to August 1 is viewed as a strategic win or does it simply prolong what could be viewed as inevitable volatility?

Lash: Unfortunately, for most nations, the latest 24-day delay announced on July 7 is essentially meaningless. Compare this to the 90-day reprieve from 145% tariffs on goods from China. That reprieve sparked a flurry of orders to quickly get goods stateside before the window closes, resulting in record volumes in June through the ports of Los Angeles and Long Beach. This applied to any pre-made inventory sitting in China, as well as goods where factories producing standard products could easily re-divert output to the US market. While these goods were coming in at a high tariff rate of 30%, this figure was something importers could wrap their heads around. Whereas at 145%, it was a non-starter.

However, 24 days does not give enough time to confidently order and receive overseas goods before the tariffs kick in, making this essentially a lame duck extension. That said, not everyone is equally affected. For imports from Canada and Mexico, the situation is different as lead times are considerably shorter.

LM: How do you view the effect of ongoing tariff shifts on consumer prices, particularly in sectors like retail and electronics?

Lash: The hard reality is that high, across-the-board tariffs hurt everyone. Despite the rhetoric, these tariffs are a tax paid for by American consumers—plain and simple. The same goes for retaliatory tariffs by foreign nations on U.S. exports. Higher taxes mean higher prices. In short, everyone suffers, especially for retailers reliant on access to imports and industries like electronics and apparel, where most factories are outside the US.

It's important to note that tariffs themselves are not bad. They’re important policy tools to counter unfair trade practices and are most effective when used sparingly, protecting domestic industries with little impact on the overall economy. When used indiscriminately, tariffs become a blunt tool—more like an economic cudgel. For context, the Fed gets concerned when interest rates are in the 3-4% range. That’s 5-10 times less than the additional duty rates set to be enforced August 1!

Ironically, while the U.S. is the one flexing its market power to strongarm other nations, the true victim risks being America itself. Specifically, consumers, businesses, and the economy. Why? Through these policy actions, America has unilaterally declared a trade war with the rest of the world all at once, for all imports. Whereas other nations are only in a trade war with one country. This puts the U.S. in a disadvantaged position. As America burns its trade bridges with allies and foes alike, other countries aren’t sitting still. They are forging new arrangements and strengthening relationships to reshape the face of international commerce, for a new world dynamic that trades around, instead of with, the U.S.