Nearly all companies are taking actions to avoid tariffs. Here are 8 ways. 
Apollo Global Management has an interesting discussion on The Growing Role of Private Credit but it was the above chart that caught my eye.
Relocating to the US vs Scaling Down
Trump wants businesses to relocate to the US, but the chart shows only 3 percent of service companies and 11 percent of manufacturers are taking steps in that direction.
In contrast, 13 percent of manufacturers and 15 percent of service companies are scaling down operations or closing the business.
Eating Costs or Passing them On
76 percent of manufacturers and 47 percent of service companies are passing on some costs.
50 percent of manufacturers and 42 percent of service companies are eating some costs.
New Domestic Supplier
37 percent of manufacturers and 26 percent of service companies seek a new domestic supplier.
That may be easier said than done, but it will still be more expensive than prior to the trade war.
Impact on Corporate Profits
Passing on costs is guaranteed to reduce sales.
Some corporations are likely planning hikes prices over time but that risks a consumer backlash dues to multiple hikes.
Either way, corporations will have less profits from sales in addition to the direct hit from eating costs internally.
Less profit also applies to companies who find a US supplier.
The Fed is Very Worried about Tariff Passthrough onto Prices
On June 8, I noted The Fed is Very Worried about Tariff Passthrough onto Prices
The Fed, businesses, and consumers are all concerned over price hikes.
Only Three Things Can Happen
- Corporations can pass on the tariffs
- Corporations can eat the cost
- A combination of the above
The Results
- To the extent corporations pass on the costs, consumers will pay the tariff. That means consumers will cut back somewhere else, exhaust savings, or go into debt.
- To the extent corporations eat the costs, that’s a direct hit on corporate profits.
- If corporations misjudge how much they can pass on, they will also take a hit on profits.
Companies unable to pass on costs either have to eat the costs or shrink their business.
13 percent of manufacturers and 15 percent of service companies are now shrinking.
These numbers will get much worse given Trump Doubled Steel and Aluminum Tariffs to 50 Percent on May 31.
> So 46% of respondents reported that all or some of their imported products are currently subject to tariffs,
> And 45 % of firms noted that they either do not import products from outside the country or that their imports are not subject to tariffs.
– Almost three-quarters of manufacturers reported direct tariff impacts, compared to only 36 percent of non-manufacturing firms.
> It appears to me, that The Manufacturers didn’t plan properly for this Highly covered, and spoken about for a Long, Long Time, EVENT!
>> Find products here in the U.S. that will work, or lower wages (Layoff) to compensate for now, until you do. You don’t risk the whole Company this way, but do have to remove the least productive and/or rarely adding value employees.
Trump winning again? Trade wars are so easy to win.
Re “Only Three Things Can Happen”
Great example of the False Dichotomy Fallacy.
Humans are creative, and economic systems are deeply nonlinear. Second-order (often “unintended”) side-effects often dominate the “obvious” effects of any given change.
Here are a few possibilities that are potentially anti-inflationary:
(1) Tariffs result in artificial, but real, demand for new sources of supply. This leads to increased supplies, lowering costs to buyers while increasing profits for new suppliers and decreasing profits for legacy suppliers. We see this in the survey data above – far more companies are looking to increase their production or find new suppliers, than are shutting down in frustration.
(2) Reduction in input costs reduces prices and/or increases profits for downstream production. OPEC’s increasing oil supply and reducing oil prices is one example.
(3) Tariff revenue enables higher government spending for a given “tolerable” level of deficit spending, which increases overall employment. Those additional workers have a much higher propensity to spend than the corporate owners who would’ve otherwise received the “tariff money” in profits. The result is additional demand throughout the economy, and overall economic growth.
7-9% of business close each year. That’s an average, the year isn’t over yet.
15% so far
We are months out from the full effect of this idiocy.
In other words, they do what businesses do every day. Scale up, scale down. Pull inventory forward, push inventory back. Hire and fire.
Here’s another article regarding my previous post about inflation. On the Finviz site is how I found Mish’s site, he and ZeroHedge are the two sites I read from the list of blogs they post there.
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https://www.zerohedge.com/markets/inflation-expectations-tumble-latest-ny-fed-survey-suggest-fed-late-cut
Inflation Expectations Tumble As Latest NY Fed Survey Suggests Fed Late To Cut
For the first time since 2024, inflation expectations tracked by the NY Fed survey of Consumer Expectations dropped across all three horizons in May.
Fed survey shows inflation expectations dropping. Sorry UMich.
This seems to be contrary to what people expected to happen with tariffs.
Inflation Since January 2025
According to CPI data:
Jan 2025: ~3.00%
Feb: 2.82%
Mar: 2.39%
Apr: 2.31% (lowest since Feb 2021)
Despite new tariffs in early 2025, inflation continued to decrease, not accelerate.
https://www.usinflationcalculator.com/inflation/current-inflation-rates/
Inflation data is no longer accurate. Some would argue it was never accurate but with Trump laying off thousands of government workers, there is more certainty that the numbers are becoming inaccurate and meaningless.
https://tipswatch.com/2025/06/05/inflation-data-collection-is-getting-scaled-back-what-does-it-mean/
From the link you posted this is what was written:
“So, without any evidence to the contrary, I will accept that the U.S. inflation numbers will continue to be “relatively accurate,” which is about as good as they ever were.”
So that means that the numbers I posted are about as accurate as they ever were according to your article. Inflation is decreasing, it’s not exploding like people thought it would. And that’s good, now the tariffs can continue to do what they were intended to do, reindustrialize this country and end the dependence on foreign adversaries like China. Here’s a good book to read for anyone interested.
Reshore: How Tariffs Will Bring Our Jobs Home and Revive the American Dream – February 18, 2025 by Spencer Morrison (Author)
The Department of Posterior Statistics is operating at full steam, however.
Inflation data was garbage long before Trump entered the scene.
Well golly gee willikers Batman you mean that Fed holding rates about 230 basis points above inflation, which is in historical range of very tight monetary policy is having an impact upon a Debt based growth, now does not matter ?
It must be all about Trump tariff policy instead.
“Less profit also applies to companies who find a US supplier.”
The real challenge, as I have been harping on for years now, is that labor is becoming increasingly difficult to find. Tariff price increases are one thing that can be accounted for eventually once it’s all sorted out but what can’t be sorted out is the growing lack of labor.
Another cold hard example of the demographic crisis. It’s not just aviation, it’s every industry…
https://www.cnbc.com/2025/06/08/trump-jobs-aviation-airplanes-engines.html?&qsearchterm=aviation%20mechanics
LAFAYETTE, Ind. — President Donald Trump has said he wants to bolster manufacturing jobs and other technical employment in the United States. But in the aviation industry, finding skilled workers to make airplanes and engines — and maintaining those jobs for years to come — has been a struggle.
The average age of a certified aircraft mechanic in the U.S. is 54, and 40% of them are over the age of 60, according to a joint 2024 report from the Aviation Technician Education Council and consulting firm Oliver Wyman, which cites Federal Aviation Administration data. The U.S. will be short 25,000 aircraft technicians by 2028, according to the report.
Wonder why aircraft keep falling from the skies? Why air traffic control is a game of russian roulette?
At least since covid, nobody gets held back in school, so very very few of them bother to learn anything. This is reflected in the classes graduating now.
Idiocracy has arrived. Civilization going forward will be a tiny core of intelligent people trying desperately to keep the moron masses from causing extinction.
I’ve read that schools got rid of shop class. Getting an Ivy League education became more important. Eventually, Mike Rowe hosted a show called Dirty Jobs, to emphasize the important work by those who are not trained intellectual elitists.
As far as labor is concerned, humanoid robotics is making major strides. Watched a video of a second gen robot by a company called Friend. Verbally given a task and figured out how to complete it. Gen 3 is already in development. Gen 2 already working at a BMW plant.
Then you have nothing to worry about. Next time you fly in a plane feel great comfort in knowing that a robot fixed the engine you’re flying in. Hopefully, it won’t be hacked by a nefarious character.
You can’t trust modern kids around power tools or anything more dangerous than a spork. I imagine insurance had a lot to do with that.
Don’t you want all these dinosaurs dead before they go on social security?
No, I want them to get back to work and not get on social security.
TT, Trump’s Tariffs, will inappropriately receive a disproportional amount of attributional credit for the coming global equity crash. The global equity market is completing an ACWI world equity index 27 October 2023 to 16 June 2025 55/139/135/83 day :: x/2.5x/2.5x/1.5x fractal series. A ACWI 6 May 2025 5/10/10 day :: x/2x/2x blow-off with a 126 high on 6 June 2025 exceeded the 18 Feb 2025 peak of 124.3. The expected 4-phase fractal completion of the 5/10/10 day blow-off is a 5/10/10/7 day:: x/2x/2x/1.5x ending on 16 June 2025.
ICE could have been far more effective and removed many more illegals if they had properly planned their actions. For instance judges. Immigration judges don’t need to be approved by Congress. The DOJ hires them. I think what is happening in LA is a version of “wag the dog”. Trump 2.0 is failing on many fronts. The tariffs are a disaster. The big, beautiful bill is being shown for what it is, a sham. Trump now owns the Ukraine mess and is impotent to make anything happen. The Gaza genocide continues and US favorability ratings around the world continue to plummet. Trump is caught between a rock and a hard place on Iran. The Jewish lobby and Israel on one side, and Iran/Russia/India/BRICS countries on the other. So…he needs a win. A distraction. I think this mess is going to blow up in his face though. There are too many factors that can’t be controlled.
Control of the Narrative will suffice…
w/non-stop Coming Distractions…
spun into wins.
It’s not about getting the illegals out. It’s about causing riots so martial law can be imposed and enough protesters murdered to cow the rest of the country into submission. In that light, their tactics are working perfectly.
The question is, will Americans be cowed by a bunch of obese thugs in tacticool get ups, or will the 2nd amendment be invoked?
“protesters”
That word doesn’t mean what you think it means.
A rioter is also a protestor.
https://x.com/bricktop_nafo/status/1931969375449305139?s=46
this is gonna escalate with this video.
Meh, run of the mill police beating. Nobody cares.
If the small businesses made it through Covid Theater 5 years ago, that’s really saying something.
Who can ever forget the videos from China of the poor Covid victims writhing on the floors in the halls of the government med facilities prior to giving up the ghost, people having their doors welded shut on the outside with them in it by the government, the government trucks spraying the disinfectants up and down the streets, the government mobile crematoriums giving off so much emissions they could be tracked by satellites. Saw all of that right here, as a matter of fact.
Here’s some good news about tariffs:
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According to the Bipartisan Policy Center, the federal government collected $68.9 billion in tariffs and excise taxes during the first five months of the year, which is a 78% increase compared to the same period last year. Much of this revenue increase occurred in April and May after new tariffs were implemented. Some sources suggest that the Trump administration’s tariffs could raise a considerable amount of revenue over the next decade, with estimates ranging from $1.4 trillion to $2.0 trillion.
And who paid for these ‘revenues’? Tariffs are simply another TAX on the consumer.
Yes it is a tax. The government is bankrupt and they’re sugar-coating the pill. It’s either that or very high income taxes.
Good thing for the GOP many of their voters cannot tell that all taxes are taxes and they think some of them are magic money techniques
MAGA specialize in sportsball and cooking meth. not math or finance folks.
Better than what passes for hot dogs and pizza in Brooklyn – or Washington D.C.
MMT = magic money techniques
That’s the typical reply but not always true. Sometimes foreign exporters lower prices to stay competitive. Tariffs can raise prices short-term, but they also shift demand to domestic providers, which helps build local capacity. What does that mean, it means more jobs, more investment, and less dependency on rivals like China. They also protect critical industries like steel, medicine, and semiconductors that are important for self-reliance and national security. Which is why Trump’s tariffs are one more reason that the public thinks our country is finally on the right track. For the first time in nearly 20 years, a Rasmussen Reports survey shows a majority of likely U.S. voters believe the country is on the right track. Historically, support hovered in the 20–30% range.
You sound like a college professor. Rather than a shopper.
Rasmussen is a serious survey outfit. Ann’s not alone – many Americans finally think the country is doing some things right.
Her arguments hold no water. She is fantasizing about things that she hopes will happen, but won’t in any significant way.
“That’s the typical reply but not always true. Sometimes foreign exporters lower prices to stay competitive.”
Lol! Sometimes!
Yep. Sometimes.
Care to make a guess on how often that happens? And if it does happen, how much that drop in prices might be?
Of course you won’t. Because you don’t really know. You are just using that argument to blow smoke and hide the truth.
Face it . The vast majority of tariffs are paid by the importer and then passed on to the consumer.
“Tariffs can raise prices short-term, but they also shift demand to domestic providers, which helps build local capacity.”
Short term! More fairy tales. Define short term. How about 10 years? Is that short term?
How long do you think it will take to build out new US aluminum production?
In the last 45 years we have gone from 33 smelters to 4. The first new aluminum smelter in 45 years is proposed for Oklahoma, and will take 10 years to build. If built, it will increase domestic supply of aluminum from 25% to 31% (plus 25% recycling). It will reduce imports from 50% to 44%. In 10 years! And without permanent subsidies, it will not be competitive.
In the meantime we place 50% tariffs on the 50% of aluminum we use every day. It’s f*cking retarded. It will decimate US manufacturing that requires aluminum.
Empirically, tariffs act mainly as a tax on corporate profits. Corporate profits as a share of GDP are at historical record highs. I’m not shedding a tear for them.
Ann, why are higher consumer prices good news to you? Isn’t inflation bad?
the hit to corporate profits is still a tax on most consumers as so many are invested via 401k etc…………not to mention the stagflation and morass and screwed up cost of capital……interest rates……….and our isolation in world is really costly.