Tariffs chaos is leaving companies in a state of 'paralysis,' says logistics CEO
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- Flexport CEO says tariff uncertainty is paralyzing companies' decision-making.
- Anxiety grew after Trump announced tariffs on Mexico and Canada.
- Canada, China, and the EU have placed retaliatory tariffs on US products.
The CEO of logistics and freight company Flexport said that customers feel stuck because of the uncertainty around tariffs.
"Frankly, the number one reaction I see right now is a bit of paralysis of people not wanting to make a decision until there's more clarity," said Ryan Petersen on an episode of the Logan Bartlett Show released on Friday. He founded Flexport in 2013 and raised $935 million in 2022 at an $8 billion valuation.
On the podcast, Petersen said that customers don't know what to expect around tariffs. He said no country feels like a safe bet for supply chains, especially after President Donald Trump placed duties on Canada and Mexico, two of the US's closest trading partners.
"You should expect tariffs can come for any country, so that's making planning really really difficult," he said. "My advice would be get it over with quickly so people could figure out what the new normal is."
Businesses across industries are sorting out how to shift their supply chains away from countries worst hit by Trump's tariffs. Earlier this month, Pfizer's CEO Albert Bourla said that the company may move overseas drug manufacturing back to the US. Retail executives at companies including Ralph Lauren, Steve Madden, and Yeti have said in recent months that they plan to reduce their manufacturing dependency on China.
Since Trump took office in January, he has announced a string of sweeping tariffs across the US's three biggest trading partners — China, Canada, and Mexico — and the rest of the world.
Trump imposed 25% tariffs on all goods imported from Canada and Mexico and suspended many of the measures two days after they went into effect.
Last week, in retaliation for a 50% charge on American whiskies, Trump threatened a 200% tariff on all alcoholic products from European Union countries.
Trump's charges have been met with equally harsh retaliations: Canada reciprocated with a 25% tariff on all US goods, China placed a 10% to 15% tariff on agricultural goods, and the EU responded with billions of dollars in tariffs. Retaliations came at a provincial level, too: Ontario, Canada's most populous province, placed a 25% surcharge on the electricity sent to Michigan, Minnesota, and New York.