When should you plan for tariff impacts? Georgia Chamber says ASAP

In addition to a broad 10% tariff on nearly all countries, other narrower tariffs also target specific industries and countries. Exemptions have been announced after tariffs went into effect. Tariffs on some Chinese goods have increased to 145%, while China enacted 125% tariffs on many American products.

And Trump has rolled back or delayed new tariffs without much notice, including announcing April 9 a 90-day pause on a wide swath of what he called reciprocal tariffs against nearly 90 countries.

The shifting and unpredictable trade landscape is giving small businesses in Georgia whiplash, said Georgia Chamber President and CEO Chris Clark. The confusion and potential consequences of rising prices as a result of tariffs has spurred the chamber to blitz its members and elected officials with updates and reports on how to navigate the potential pain to come.

“It is aggressive,” Clark said Wednesday during a call with Georgia news outlets discussing the chamber’s blast of tariff-related reports. “This is a very important issue that impacts almost every single business in every single community in the state of Georgia, so they need the best information.”

Later Wednesday, the chamber issued a new report — its third in roughly a week — to provide advice on how certain Georgia industries could be affected and the actions they should take in preparation. Clark said some businesses have already reported tariff-related price increases, which most companies will have to pass on to their customers to retain any profits.

Credit: Georgia Chamber

Credit: Georgia Chamber

“Georgians are paying more for the products that were in the pipeline coming into the state,” Clark said. “You can’t just keep absorbing those prices. They will be passed onto consumers at some point.”

Clark added that Georgia has “such an integrated global supply chain that, quite frankly, (tariffs) could impact every single sector out there.”

That includes service providers, which could also see their costs for supplies increase. The chamber plans to release a report with advice for the service industry next week.

‘In for the long haul’

Businesses have to keep tabs on White House announcements that could alter their budgets and bottom lines — and they also have to keep up with reactions from the rest of the world.

Placing a tariff on another country can spur some form of retaliation, and some countries slapped with new taxes on trade have vowed to react in kind on American exports. This leaves Georgia industries that rely on shipping goods across borders in a bind.

Agriculture, the Peach State’s most valuable sector, is especially exposed. Farmers grow more produce and raise more livestock than we need domestically, so a lot is exported. Many of those goods are shipped to China, which is at the center of the fast-evolving trade war.

Clark warned the three-month delay on other reciprocal tariffs is not a sign of reprieve and should be taken as critical time for Georgia businesses to prepare.

“You should not wait thinking in 90 days this will all go away and be better,” he said. “Particularly on the Chinese front, we’re in for the long haul here.”

The chamber’s latest report advises agribusiness companies to consider export credit insurance or other price-protection tools to hedge against future volatility. Agencies like the state and federal agriculture departments also have resources and assistance worth considering, the report says.

Sectors like logistics should reevaluate their distribution models or find alternative ports to potentially mitigate increased costs and congestion, according to the chamber. Clark said many large companies are trying to stockpile goods before the full effect of tariffs is felt.

“Almost every railcar that you can imagine is on a train track somewhere in America right now moving goods and products. Every container ship is full. Every truck driver that’s available is moving goods and products,” he said. “So there will be a point over the next 90 days where we’re going to start really straining that supply chain.”

The ports of Savannah and Brunswick recorded their busiest first quarters on record this year, which Clark credits to companies stockpiling products. If tariffs ramp up and remain on the books, he said he is concerned that could wane later this year.

Credit: Courtesy of Georgia Ports Authority

Credit: Courtesy of Georgia Ports Authority

Need for clarity

The chamber is also urging small business owners to contact their state representatives to explain the local impacts they feel from tariffs.

“Our members of Congress need to know what the positive impacts are from these tariffs and definitely what the negative impacts are,” Clark said.

So far, Clark has not heard from chamber members about tariff-related benefits, although some industries are less exposed to trade wars or could stand to benefit in the long term.

He has heard from companies, particularly manufacturers, that could be on the brink of bankruptcy if costs soar.

“I haven’t heard anyone tell me that they’re going out of business,” he said. “I have heard from manufacturers that say if certain tariffs go into effect, at a certain point they’ll look at insolvency.”

Clark wouldn’t name individual companies, but he said one manufacturer of a common “product that we all use and love almost every day” solely relies on a supply chain that is based in Canada. He said that company fears its prices could balloon in an instant if steep Canadian tariffs become a reality.

Some industries like Georgia’s fast-growing electric vehicle and battery sectors do not have alternatives beyond importing vital parts and materials.

“There’s some things we’re never going to make here,” Clark said. “We don’t have the precious metals to make the early components for batteries, even though we put them together at the end of the supply chain.”

Credit: Justin Taylor for The Current GA

Credit: Justin Taylor for The Current GA

Overall, chamber leadership is pleading for more transparency and a longer period to adjust before steep tariffs go into effect. Clark said some Georgia businesses would likely benefit from some trade deals being overhauled, but he said that can be done without disrupting most facets of the Peach State economy.

“Businesses like stability and we like to know what the rules are … we’ll abide by those rules, but give us time to ramp up,” Clark said. “Changing the rules on us in the middle of the game makes things very difficult.”