Expect Big Changes but Bigger Opportunities
President Donald Trump’s inauguration today ushers in a historic milestone for the world. That goes double for business and supply chain pros everywhere.
I call this wave of change the Trump tsunami. Some see Trump tariffs bringing disruption and risk. I see this as a tipping point for the global economy, an opportunity for businesses to rethink how they operate. In fact, for those prepared to adapt, this is the chance to innovate and succeed. This is the opportunity for businesses to improve their supply chains and become more competitive.
This is the upcoming ride of a lifetime.
What Is the Trump Tsunami?
President Trump’s proposed tariffs, particularly tariffs on China, will change global supply chains in ways never seen before. He has even threatened tariffs on large trading partners like Canada and Mexico. However, I’m sure those are negotiating tactics to reach his political goals on illegal drugs and border security.
The threat of additional tariffs on Chinese imports is real, though. And they will affect trade, politics and the economy like never before.
Trade Policy and National Security
Ideally, a “Trump economy” will reduce U.S. reliance on rival countries and make U.S. supply chains stronger. His administration’s tariff rates will aim to encourage companies to buy from friendly nations or move production back to the U.S.
These policies are also about national security. By working closely with allies, the U.S. can build stronger and safer supply chains.
Political Goals and Tariffs
Tariffs have always been one of Trump’s favorite tools. To him, they are not just taxes on Chinese goods, electric vehicles or other imports. They are tools to negotiate better deals and tackle political issues like border security or drug trafficking.
But tariffs can backfire if they aren’t planned well. Trade wars will do the United States economy no good. Nor will they help your business, as poorly timed tariffs can lead to higher costs, disrupted supply chains and unhappy customers. To maintain economic growth, businesses need to prepare ahead of time to avoid these problems.
Economic Strategy
Trump’s plans focus on protecting U.S. industries, creating jobs and cutting unfair trade practices. Tariffs, lighter regulation and energy independence are key parts of this strategy.
These policies will accelerate the trend of ReGlobalization – a strategic reconfiguration of supply chains to prioritize resilience and optionality. Rethinking your supply chain will include strategies like nearshoring (moving production closer to home), reshoring (bringing production back to the U.S.) or friendshoring (working with allied countries).
How to Surf the Trump Tsunami
For businesses, ReGlobalization will answer the challenges above. Executive teams and supply chain pros must redesign global supply chains to add optionality. This will align your business goals with ever-changing realities.
I can almost hear readers talking about how surfing a tsunami will be nearly impossible. After all, the dangers of big waves are well-known in the surfing community. (Here are nine of the scariest, according to Red Bull.)
So, who in their right mind wants to surf a tsunami? Anybody who wants their business to succeed in the future.
Beyond nearshoring, reshoring and friendshoring, adding optionality to your supply chain will involve the following “surfboards”:
- Identifying risks in your supply chain: Look at where your supply chain is most vulnerable. Are you relying too much on a single supplier or country? Now is the time to address these risks.
- Plan for ReGlobalization: Start exploring new sourcing options. Build redundancy into your supply chain so you’re ready for unexpected changes.
- Invest in technology: Use tools like automation, data analytics and digital platforms to make your supply chain more efficient and adaptable. Digital supply chain networks will become a must.
- Work with strategic partners: Build stronger relationships with suppliers, logistics providers and friendly nations to create a more stable supply chain.
Insightful leaders who act with speed and agility can surf the Trump tsunami to greater success. They will give their businesses a competitive edge on their competition. Businesses who don’t act will flounder, drowning in the breakers.
Grab Your Surfboards
President Trump’s policies are set to reshape global trade and supply chains. While these changes bring challenges, they also open the door to new opportunities. Businesses that prepare now will not only survive but surf to success in this new seascape.
The Trump tsunami is here, and the choice is yours. Will you let the events after Trump’s inauguration overwhelm you, or will you ride the waves to new heights? Wax your surfboards, position yourself strategically and get ready for the greatest opportunity in supply chain history.
Feel free to contact me to find your surfing partners. Because the ride of a lifetime starts today.
Related Reading
- Trump Tariffs: The Rest of the Story
- Dynamic Optionality Beats Expanding Your Supply Chain House
- 6 Strategies to Surf Through the Trump Tariff Tsunami
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.