US companies up against 'nightmare' tariff wall

July 28, 2025

Donald Trump's return to office has brought a dramatic shift in US trade policy, with new tariffs ranging from 10% to 50% on imports from around the world, compared to previous average rates below 2. 5%. Despite reaching "framework" agreements with major trading partners like the EU and Japan, most of these deals leave significant issues unresolved while establishing unprecedented tariff levels.

Who is affected

Small business owners like Jared Hendricks of Village Lighting Company and Julie Robbins of Earthquaker Devices
Large corporations including General Motors, Tesla, Hasbro, Mattel, and RTX (formerly Raytheon)
US consumers facing potential price increases of 10-20% on imported goods
Import-dependent retailers like Waza, a Los Angeles shop selling Japanese products
American workers whose employers are delaying hiring and expansion due to tariff costs
US manufacturing sector, particularly steel companies that may benefit from protections

What action is being taken

The US government is implementing tariffs of 10-50% on most imported goods, with higher rates set to begin August 1
The White House is granting some exemptions to certain industries and countries through negotiated "framework" agreements
Businesses are taking out loans to cover unexpected cost increases, as Village Lighting Company did with a $1.5 million loan
Companies are raising prices to offset tariff costs, with Waza increasing prices by 10-20%
Businesses are delaying hiring and purchases while reconsidering expansion plans
The US government is collecting record tariff revenue, exceeding $100 billion this fiscal year

Why it matters

The new tariff structure represents the steepest trade barriers the US has imposed in over a century
Economists predict these policies will slow US economic growth by 0.8-1 percentage point this year
Businesses face significant cost increases, with GM alone paying over $1 billion in tariffs in one quarter
Consumer spending on discretionary services has already declined, something historically seen only during or immediately after recessions
The tariffs are creating uncertainty for businesses, affecting their ability to plan and invest
While some sectors like steel may benefit from protections, many import-dependent businesses are experiencing financial strain

What's next

No explicit next steps stated in the article

Read full article from source: BBC