President Donald Trump’s decision to make a U-turn and suspend for 90 days reciprocal tariffs against most nations has world leaders applauding because they say it gives them time to negotiate with Washington.
However, tariffs on Chinese imports will increase to 125% and China is imposing tariffs of 84% on U.S. made goods.
The back-and-forth uncertainty over higher prices and more restrictions on trade come as the world economy weathered several years of supply chain unease because of the COVID-19 pandemic.
And it is that lesson that has many businesses better prepared.
Patrick Garner, with Northern Virginia’s Cardinal Plumbing Heating and Air, said they have been preparing for higher tariffs and higher costs for years, encouraging customers to lock in their long-term maintenance plans. The company has had that same approach when it comes to negotiating contracts with parts and equipment suppliers.
“Any company that has been around for more than a few years has seen this coming up and started to prep with agreements with suppliers and some vendors,” Garner said.
“We are going to see those prices increase and we are going to hold out as long as we can, but eventually they are going to hit us as well.”
Much of the company’s business is based on long-term relationships with both vendors and customers, especially those homeowners and rental properties with regular maintenance plans to keep their plumbing and HVAC systems running at peak performance.
The company has been able to hold the line on price increases, but he said the likelihood is, at some point, they will have to pass along the higher costs.
“Those maintenance plans that we offer to serve customers it’s going to be non-viable at some point,” he said.
“Don’t put off that repair, because if you do, it may lead to a more costly replacement.”
Many business leaders, including Garner, say what is most important is certainty, so they can develop a plan and stick to it, but the back and forth from the White House keeps sending conflicting signals about those long-term goals. Because of the steps they’ve taken, Garner believes his company is in a good position to weather the tariff storm.
“It’s clearly a concern. One we can manage, but clearly, it’s concerning,” he said.
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