Tariff pause brings little relief as supply chain uncertainty remains intact

With the 90-day pause on reciprocal tariffs placed on U.S. trading partners now in place, save for a 10% baseline tariff and also the furry of tariffs placed on China throughout the last week, there is a question of “what now?” in logistics circles, to say the least.

It goes back to the ubiquitous topic, especially these days, of supply chain uncertainty—driven, of course, largely by tariffs and trade policy actions by the White House and retaliatory actions taken by U.S. trade partners, especially China.

While there is always going to be some level of supply chain uncertainty, really, at any given moment. The level of which we are seeing now does truly feel unprecedented. That was made very clear in a recent LM reader survey, which found that more than 90% of respondents concerned that their logistics operations are currently being impacted by various types of market uncertainty, with tariffs being the top driver for the uncertainty.

The questions being raised in regards to the current level of uncertainty by industry stakeholders really are similar, regardless of being a shipper, carrier, analyst, 3PL, and distributor, among other roles.

Those questions include things along the lines of: Where do I invest? How much capital do I allocate for investments? Can, or should we hire more people? Do we need to reconfigure our entire supply chain operations? This list could go on and on, but that helps to provide an idea of what people are thinking?

And, to be sure, these are not exactly questions that can truly be answered in a 90-day period either, when the U.S. pause on reciprocal tariffs expires, effective July 9. One key reason for that, of course, is that, at that point, the uncertainty—not that it will have “gone away” by then—is likely to become further heightened and reinforced. Not a good thing, especially in the supply chain where certainty, consistency, and predictability are always wanted and needed.

Given the, excuse the cliché, tariff whiplash that has been occurring, an industry friend of mine recalled President Trump’s first term, citing a recent speech given by a Stanley Black and Decker executive, observing that, at that time, the company heard the President loud and clear regarding trade policy and tariff actions taken, at that time, with the company moving production from China to Mexico, following the negotiating and signing of the USMCA deal. But with the White House ostensibly dismissing USMCA with President Trump back in office and calling for a major uptick in U.S.-based manufacturing, that makes it harder for a company like Black and Decker to sell products for an operating profit, as labor costs become much higher.

There is also the real possibility that companies could simply choose to sit the tariff tension out and not make moves to invest and relocate operations, given the possibility that policies see major changes after the 2028 election, which clearly is not all that soon.   

Will it come to that? Maybe, maybe not? In this age of supply chain uncertainty, it really cannot be ruled out.