From global automakers like Harley-Davidson to small tech startups, companies are looking to rework their entire supply chain model which was previously built for a stable era and open trade policy.
On Monday, American motorcycle maker Harley-Davidson warned its potential buyers about the higher cost of its vehicles as it would shift its manufacturing to plants in India, Thailand, and Brazil which were destined for the European Union. This move comes after the retaliatory EU tariffs.
Companies which were initially waiting for the status quo of global trade are now taking action to protect their company from shifting trade policy.
In April, Matt Levatich, the CEO of Harley Davidson said that the plant in Thailand was a “Plan B” which the company used after Trump withdrew the Trans-Pacific Partnership free-trade agreement from last year.
Harley is one of the examples of how companies are facing losses and also finding themselves in crosshairs after Trump’s “America First” agenda.
Last week Steelcase Inc. an office furniture maker reported a 230 basis point fall in the company’s gross margins on its American business. The reason for this is due to the high cost of raw materials for metal import tariffs.
Steelcase has since increased its price in this month but the expected profit remains under pressure for the next two quarters.
Last month, Dustin Burke, a partner at Boston Consulting Group told Reuters that “A manufacturer can no longer assume that the direction of trade policy is towards freer and freer trade over time.”