Amid Tariff Uncertainty, Businesses Rush Imports and Prepare for Reshoring

By Arriana McLymore, Helen Reid, and Emma Rumney

NEW YORK/LONDON (Reuters) - Despite President Donald Trump's repeated threats of broad tariffs, businesses have been actively expediting deliveries to the United States in anticipation of their impact.

Early Holiday Earnings Show Front-Loading

Recent holiday quarter earnings reports reveal that numerous companies, including automakers, cognac makers, and producers of Italian cheese and wine, have increased shipments to the US.

Supply Chain Adjustments

"Companies are currently front-loading their imports into the US," said Patrick Lepperhoff of supply chain consultancy Inverto. "They have modeled tariff scenarios and decided to import sufficient volumes to be covered for a time."

Challenges and Uncertainty

Trump's fluctuating tariff plans have created challenges for businesses, leading to supply chain disruptions and prompting some to consider moving production to the United States.

Pre-Office Return Rush

Uncertainty prior to Trump's return to office in January accelerated shipments, resulting in a record $122 billion US trade deficit in December.

Retailers and Suppliers Collaborate

PacSun, a retailer of casual clothing, has implemented contingency plans by bringing forward a portion of its first-quarter sales and forming a "tariff taskforce" to assist suppliers.

Trump's Tariff Threats

Trump's tariff threats have ranged from potential 100% to 200% fees on Mexican cars to universal tariffs on imported goods.

Cross-Border Impacts

The US imported approximately $844 billion worth of goods from Canada and Mexico in 2024, representing around 28% of total imports. Tariffs could significantly impact these trade partnerships.

Unexpected Beneficiaries

Some companies, such as German chemical company Lanxess, have experienced higher-than-expected profits due to advance purchases by US customers.

Container Surge and Bottlenecks

Overall US imports of 20-foot containers surged in November and December, reaching the highest levels since 2021. Steel imports increased in anticipation of tariffs, leading to bottlenecks and higher costs.

Automotive Sector's Vulnerability

The automotive sector is particularly vulnerable to tariffs, as many companies have established factories in Canada and Mexico to access affordable labor.

Supply Chain Restructuring Considered

Toyota Motor has indicated that tariffs could push the company to shift production of its Tacoma model pickups to the United States.

Overseas Earnings Risk

Nearly 40% of S&P 500 earnings come from overseas. Sectors with significant foreign exposure, such as tech, consumer discretionary goods, and industrials, have expressed concerns about supply chains and potential reshoring.

Uncertainty Dampens Demand

Some companies are hesitant to increase orders without clarity on demand. Toy maker MGA Entertainment has chosen not to ship in extra product due to the perishable nature of its business.

Drinks Industry Cautious After Past Experience

The drinks industry remains wary of overstocking based on previous experiences. Wine importer Old Bridge Cellars (OBC) incurred significant costs by purchasing a year's worth of champagne at the beginning of Trump's first term, only to be left with excess inventory due to tariff exclusions.