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U.S. President Donald Trump's temporary rollback of newly imposed tariffs has eased market volatility but left many global businesses grappling with ongoing uncertainty over trade policy and supply chain disruptions.
U.S. President Donald Trump's sudden about-face on sweeping import tariffs did little to soothe companies' worries about the fallout from his trade war and its chaotic implementation: soaring costs, falling orders and snarled supply chains.
In a stunning reversal, the president said on Wednesday he would temporarily lower the hefty tariffs he had just imposed on dozens of countries, though he also hiked duties for China and kept 25% tariffs levied on aluminium, steel and autos in place.
The news sent global stocks soaring after an intense bout of volatility that wiped trillions of dollars off equity markets. Investors hope there will now be time for negotiations to avert a full-blown global trade war. MKTS/GLOB
On Thursday, the European Union said it would pause its first countermeasures on about 21 billion euros ($23 billion) of U.S. imports.
But for company executives, the latest reversal in Trump's tariff agenda has only added to confusion about its objective.
Companies with complex and diverse supply chains spanning multiple countries from China to Germany were already scrambling to work out how they would be affected by duties and grappling with possible price hikes to mitigate tariff risks.
Now they are questioning what happens after the 90-day pause.
Those tricky calculations come at a time when consumer confidence is waning and worries are growing about a global recession.
"Global trade flows are complex and the (...) conditions for cross-border trade are currently changing rapidly," German chemicals company BASF said on Thursday.
The company said the direct impact of U.S. tariffs would be limited due to its high proportion of local production, but added it was difficult to estimate the effects of a trade war on demand for its products and its customers.
Tech giant Apple AAPL.O has chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million, to the United States from India.
Analysts have warned that U.S. prices of iPhones could surge, given Apple's high reliance on imports from China, the main manufacturing hub of the devices, which is now subject to Trump's highest tariff rate - an eye-watering 125%.
CONSIDERABLE UNCERTAINTY
"A 90-day pause on tariffs, while framed as a temporary relief, creates considerable uncertainty for businesses," said Anita Wright, chartered financial planner at Bolton James.
Trump says he wants to bring back manufacturing to the United States, but the constantly changing policy makes it risky to invest for the long term.
"Companies are likely to remain hesitant to make spending or hiring commitments without clarity on long-term trade policy," Wright said.
Some companies, including General Motors GM.N Porsche P911_p.DE and Mercedes-Benz MBGn.DE, have built up inventory in the U.S. to get ahead of tariffs.
But the uncertainty is dimming the outlook for later this year, trade executives said. Weaker U.S. consumer confidence is already hurting spending on items like sneakers.
According to a weekly sales survey by industry association Footwear Distributors and Retailers of America, in the eleven weeks since Trump's inauguration, shoe sales in stores are down by 9.5% from the same period last year. Their members include Nike NKE.N, Adidas ADSGn.DE, Skechers, and Walmart WMT.N.
A spokesperson for Inter IKEA, which makes IKEA products and supplies them to franchisees around the world, said tariffs make it more difficult to keep prices of home furnishings affordable.
"It's too early to say what level the tariffs will affect the prices of our products, but we are closely monitoring the situation and will continue to evaluate how it evolves," they said.
The outlook for earnings season, which kicks off in earnest next week with LVMH LVMH.PA, ASML ASML.AS and L'Oreal OREP.PA, is increasingly gloomy.
Volkswagen VOWG_p.DEwarned late on Wednesday that first-quarter profits were much weaker than expected and included a charge for the cars it's sending to the United States.
Trump's temporary cuts offer little relief to auto, steel and aluminium companies still incurring 25% U.S. tariffs.
Serbia's Testeral, which makes aluminium and PVC products for the construction industry, may have to lay off staff if tariffs remain in place, CEO Sanja Stanimirovic told Reuters.
The company cannot easily raise prices to cover the additional cost because it is locked into long-term contracts, she said. The company employs about 120 full-time staff and 80 seasonal or part-time workers.
"This (the tariffs) poses a significant risk to our company at present," she said.
($1 = 0.9007 euros)
AnewZ has learned that India has once again blocked Azerbaijan’s application for full membership in the Shanghai Cooperation Organisation, while Pakistan’s recent decision to consider diplomatic relations with Armenia has been coordinated with Baku as part of Azerbaijan’s peace agenda.
A powerful eruption at Japan’s Shinmoedake volcano sent an ash plume more than 3,000 metres high on Sunday morning, prompting safety warnings from authorities.
A day of mourning has been declared in Portugal to pay respect to victims who lost their lives in the Lisbon Funicular crash which happened on Wednesday evening.
The UK is gearing up for Exercise Pegasus 2025, its largest pandemic readiness test since COVID-19. Running from September to November, this full-scale simulation will challenge the country's response to a fast-moving respiratory outbreak.
A Polish Air Force pilot was killed on Thursday when an F-16 fighter jet crashed during a training flight ahead of the 2025 Radom International Air Show.
Mozambique is taking a major step to expand electricity access with the $6 billion Mphanda Nkuwa hydroelectric plant, the largest such project in southern Africa in 50 years.
Czech police have arrested a 51-year-old man long suspected of driving a high-speed racing car on public motorways, a case that has captured public attention since 2019.
Max Verstappen secured a commanding victory at the Italian Grand Prix on Sunday, taking his first win since May and the third of his season.
A manhunt is underway in suburban Houston after a gunman opened fire at a local bar early Sunday, killing one person and injuring five others, police said.
India has warned Pakistan of “high floods” along the Sutlej River as northeastern regions prepare for another intense monsoon spell, with nearly 2 million people already displaced, officials said on Sunday.
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