Advice on surviving the tariffs from the Georgia Chamber
Chris Clark, the typically sunny president and CEO of the Georgia Chamber of Commerce, appeared unusually pensive discussing global trade tensions during a half-hour media briefing commenced via Zoom in mid-April. The overarching theme of Clark’s message, stated explicitly more than once: “I’m worried.”
Clark, sounding alarms on multiple fronts, might well have been speaking for his counterparts in 49 other states when he addressed the pressing challenges confronting Georgia businesses. It starts — but certainly doesn’t end — with the careening unpredictability of the Trump administration’s global tariffs regime and other nations’ reactions to them, Clark explained.
“All of our businesses here in Georgia,” he said, “are just trying to make sense of what’s happening in Washington right now, particularly with respect to Beijing. Businesses like stability. We like to know what the rules are. Changing the rules in the middle of the game makes things very difficult. There’s a sense of whiplash in the business community every day.”
Clark’s tone became more urgent.
“We are asking the administration and members of Congress and our global partners to work quickly to reestablish stability.”
Clark spoke two weeks to the day after President Trump’s executive order imposing a minimum 10% tariff on all imports effective April 5. Nation-specific tariffs on imports from dozens of countries that were scheduled to take effect April 9 have since been suspended for 90 days, pending potential bilateral trade agreements. The 10% tariff remains in effect, as does a separate 25% tariff on all steel, aluminum and automobile imports. Tariffs applied to China, Trump’s chief target, have reached 145%, with China reciprocating in kind.
Sudden Impact
Consumers, says Clark, have begun to feel the effects.
“We’re already seeing it at the grocery store, particularly from fruits and vegetables that are imported from Mexico and South America. The next place we’ll see it is consumer products.”
Of fundamental concern to the Chamber, though, are the concerns being expressed by businesses the length and breadth of Georgia — squeezed as they are by higher input costs, supply chain uncertainties and the effects on exports of reciprocal tariffs.
“The constant disruption from both United States and foreign governments poses significant challenges across nearly every Georgia business sector,” the Chamber wrote in a report issued shortly after Clark’s presentation, the third such dispatch in a rapid-fire series of guidance to its members. “Whether you operate a small manufacturing plant, retail store, farming operation or a multinational logistics hub, these developments may impact your supply chain, pricing and competitive outlook.”
On the Zoom call, Clark drilled down on difficulties facing the state’s manufacturers, agricultural exporters and construction sector.
“Every major manufacturer in Georgia is getting supplies from out of country,” Clark told reporters on April 16. “I have heard from manufacturers saying that if new tariffs go into effect, at a certain point they’ll look at insolvency in a short period of time.
“I am worried about what’s happening to farmers,” Clark said. “I’m especially worried about Georgia farmers in the soybean space and the pecan space, because China has become a huge purchaser of pecans.
Seeking new markets for Georgia pecans
Photo from Lee Lawson: Getty Images
“Infrastructure and development projects,” he added, “will feel the ripple effect of costlier steel and other building materials. Builders are warning that prices of construction inputs are rising. A surge in material costs could make some projects economically unfeasible. We’re encouraging every sector out there to be prepared.”
‘Bulk Up’
But how to prepare?
An immediate priority would be to mark July 8 on the calendar as the expiration date on the administration’s 90-day pause on bilateral tariffs. Be swift, Clark said, to bolster imported inventory — both raw materials and finished goods — as doing so is likely to become more challenging as July 8 approaches and businesses scramble to get ahead of it.
“Bulk up those orders and bring them in faster,” he said. “But also realize that the supply chain right now is as full as it’s been since right after COVID. Almost every rail car that you can imagine is on a train 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. So, it will get to a point over the next 90 days where we’re going to start really straining that supply chain.”
“A surge in material costs could make some projects economically unfeasible.”
— Chris Clark, President and CEO, Georgia Chamber of Commerce
Building up inventory, Clark acknowledged, could be a tall order for smaller businesses — especially small manufacturers and retailers — whose access to funds and storage space might be limited.
“Many of them,” he noted, “are living week to week or month to month. To those men and women,” Clark suggested somewhat ominously, “we’re suggesting that they go ahead and talk to their banks, develop a plan to try to secure additional capital.”
In for the Long Haul
Additional guidance from the Georgia Chamber could apply to businesses nationwide:
- Utilize Foreign Trade Zones, which can help delay or avoid duties on imports until goods enter U.S. commerce.
- Seek out domestic suppliers or suppliers from lesser-impacted overseas markets. India, for one, has strongly signaled a desire to reach a trade agreement with Washington.
- Leverage AI, blockchain and other emerging technologies to help adapt to quickly evolving circumstances.
- Engage with members of Congress. “They have a role to play here,” says Clark. “There are good ways to do this, and we can do them through a much more judicious process.” In its April 16 guidance, the Chamber provided contacts to Georgia’s two U.S. senators and all 14 members of the state’s House delegation.
“Businesses,” concluded Clark, “need to be smart right now. Don’t think this will all go away in 90 days. We are in for a long haul.”
