Based on the headlines, it is easy to imagine the impact of Donald Trump’s global tariff war bringing steel producers’ or car manufacturers’ CEOs and, of course, penguins, to their knees in tears.
While the immediate impact might deliver a remote degree of pain to the customer experience industry, with the EU looking to retaliate with a possible tech tax, there are many ways for the impact to reach far and wide.
At some point, with many nations ramping up their responses with tariffs of their own, the macroeconomic impact will probably hit all businesses. Also, penguins do have knees, but they can’t cry. We checked so you don’t have to.
The negative impacts of tariffs on trade and employment, and ultimately CX
One example of an instant impact, especially for retailers, is the raising of “de minimis” trade thresholds with China. This will add to the price of low-cost goods being shipped long distances. That might benefit European retailers who haven’t fallen into this trap, or who can extricate themselves from it. With tariffs hitting both consumers and businesses, generating inflationary effects around the world, no one is immune.
For employers, “Many businesses are keen to expand, but with several new plans and policies underway – including employer tax rises, updates to the Employment Rights Bill, and Welfare Reforms – we remain in a period of hesitation with little action being taken when it comes to making recruitment plans. This is exacerbated by macroeconomic uncertainties including the USA’s latest trade tariffs, and the impact of global conflicts.” said Michael Stull, director at ManpowerGroup UK.
For UK businesses, “Tariffs create trade barriers that are likely to hamper growth. Lack of growth may worsen the economic outlook, potentially leading to higher taxes and job cuts.” said Bina Gayadien, global mobility and employment partner at Spencer West LLP law.
“In my industry – Global Mobility and Employment- tariffs could reduce demand and therefore international operations or expansions may need to be scaled back or scrapped. Companies with international operations in regions like Asia may decide to cut costs by sending fewer people on international secondments. This would directly affect the companies supporting UK businesses with their international relocations including tax, immigration, and relocation providers. Does that mean that we will see operations moved from Asia to the US? I am not sure. Much will depend on how other countries respond and if the US makes any changes to the recent announcements.” West continued.
For CX professionals, limitations on hiring consultants, budgets for customer experience efforts and even reductions in team numbers could be one impact if the trade battle extends into months or years. Whatever your role, leaders must start planning for uncertain times, and add greater flexibility to their operations or business plans.