USA 
United Kingdom
Nobody can say they weren’t warned. But maybe not so many had a proper grasp on what they were being warned about.
We’re talking about trade tariffs here.
Although a large proportion of the electorate thought he was simply trying to lower the price of eggs, as sure as those eggs are, in fact, eggs, Trump’s tariff policies have sent shockwaves through the US economy, with both supporters and critics weighing in on their long-term effects.
By imposing tariffs on certain countries importing into the US, the administration has sought to bolster domestic manufacturing and reduce reliance on foreign goods. The inevitable retaliatory tariffs on American exports have, however, sparked concerns over rising costs, business uncertainty, and job losses across industries.
Just this week, Trump said he intends to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports, the latest in a series of measures threatening to disrupt international trade.
He said levies on vehicles would come as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade.
He’s not alone in imposing tariffs, of course. The European Union, collects a 10% duty on vehicle imports, four times the US passenger car tariff rate of 2.5%. Which is probably the cause of his sense of injustice. The US though, already collects a 25% tariff on pickup trucks from countries other than Mexico and Canada.
Tariffs are nothing new, but starting trade wars in a world of hard-won global trade agreements? Well, that’s something else.
What the Federal Reserve thinks
For both large corporations and small businesses, those tariffs present significant challenges. Supply chain disruptions, increased operational costs, and shifting trade partnerships are already reshaping the business landscape.
While some companies undoubtedly benefit from reduced competition, which may lead to job creation, others struggle to absorb higher costs or find new markets for their goods. As industries adjust, HR departments are facing growing concerns over workforce stability, skills gaps, and labor relations.
Minutes from the Federal Reserve's January meeting revealed members of its committee believe Trump's policies might "hinder the disinflation process”. Or, in plain English, lead to price rises.
"Business contacts in a number of districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs," the minutes said.
The meeting also revealed "elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes to trade, immigration, fiscal, and regulatory policies”.
One thing business leaders repeatedly tell us they do not like, is uncertainty.
Business challenges and workforce adjustments
Manufacturing, agriculture, and retail are among the hardest-hit sectors. For major manufacturers reliant on foreign steel and aluminium, the tariffs have increased production costs, forcing them to make a choice of either passing expenses onto consumers or streamlining operations. Small businesses, which often lack the financial resilience of large corporations, face even greater difficulties in absorbing those costs.
American farmers have also suffered due to retaliatory tariffs from China, Canada, and the European Union, which have driven down demand for key food exports like soybeans and pork.
Many agricultural businesses have already been forced to cut jobs or seek government subsidies to stay afloat. By contrast, domestic producers of tariff-protected goods, such as steel and aluminium, have seen short-term gains, with some companies expanding their workforce.
Those benefits are often offset, however, by increased costs for industries that rely on those raw materials, such as automotive and construction.
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Retailers, particularly those that rely on imported goods from China, have faced rising costs due to the tariffs. Many companies have had to adjust pricing strategies or seek alternative suppliers, leading to disruptions in supply chains and potential layoffs as businesses try to remain competitive.
HR challenges: retention, reskilling, and morale
For HR professionals, Trump's tariff policies bring a new set of workforce challenges.
One obvious concern is job security, particularly in industries facing declining demand due to retaliatory tariffs. Layoffs and hiring freezes may become common in affected sectors, requiring HR teams to develop strategies for managing workforce reductions while maintaining morale.
Reskilling and workforce planning is another issue. As businesses shift operations or adapt to changing market conditions, HR departments may need to focus on retraining employees for new roles - particularly crucial for industries like manufacturing, where automation and domestic production shifts may alter job requirements. Investing in upskilling programs can help employees transition into new roles and reduce the impact of job losses.
Employee morale will no doubt be affected by the uncertainty the policy creates and the economic impact can lead to decreased productivity and engagement among workers. HR leaders must prioritize transparent communication and support programs to help employees navigate industry changes.
Long-term outlook on tariffs
While some industries have benefited from Trump’s tariffs, the broader economic impact remains uncertain.
Ultimately, Trump’s strategy is reshaping the American workforce, creating both opportunities and challenges for businesses. The consensus seems to be that it will create more in the way of challenges that quick wins.
Careful planning, investment in workforce development, and a strong focus on employee engagement are now more important than ever for the next four years at least.
