Joel Lange, executive vice president and general manager of Dow Jones Risk & Research, speculates about how the policies of a second Trump administration will affect sourcing, regulation, investment and trading patterns in 2025 and beyond.
The first Trump administration imposed a series of tariffs on imports from China, which were retained by the Biden administration. Now, with Donald Trump embarking on his second term as president, tariffs and sanctions could become much more widespread, affecting not just goods from China, but Mexico, Canada and Europe as well.
The result could be an increase in U.S. domestic manufacturing, Lange notes, but it remains to be seen how broad and severe any new tariffs will be. Trying to re-source multiple components of global supply chains “really is a game of Whac-a-Mole,” he says. And it’s uncertain at this point whether Trump’s threats of higher tariffs will materialize, or are just being employed as “bluster,” in order to achieve favorable results in trade negotiations.
In the meantime, Lange says, companies need to be engaging in long-term analysis and planning of their supply chains, in order to determine exactly where they’re sourcing raw materials, components and finished goods, and from whom.
The relationship between the U.S. and China is especially problematic, given the interconnectedness of those two countries’ economies. Lange says American businesses need to prepare for “gray swans” — improbable events that might nevertheless occur —and be prepared to adjust their supply chains accordingly.
Also in question is the future environment for mergers and acquisitions. Lange sees “generally excitement” in that sector, with businesses expecting lighter regulation under a new Trump administration. But national security concerns could intrude to disrupt multinational transactions, such as the proposed merger of U.S. Steel and Japan’s Nippon Steel that the Biden Administration moved to block.