Tariff Deluge Steers Companies to Supply Chain Analysis, M&A

International Trade attorney Robert Friedman was quoted in an S&P Global Market Intelligence article examining how businesses are adjusting their supply chains in response to tariffs announced or imposed by the Trump Administration. The publication reported that S&P 500 company earnings calls during the fourth quarter of 2024 saw a notable increase in mentions of tariffs — nearly doubling the count from the previous quarter — as then-President-Elect Donald Trump reiterated his trade policy plans. Since then, tariffs on imports from China, Mexico and Canada, coupled with universal duties on steel, aluminum and semiconductor chips and a call for reciprocal tariff investigations have forced action from companies looking to avoid shipping bottlenecks or passing on too high of costs to customers. Mr. Friedman observed that one strategy being deployed is pursuing mergers and acquisitions (M&A) with U.S.-based targets, particularly in the automotive, energy and manufacturing industries. He explained conversations regarding joint ventures and other partnerships to onshore aspects of the supply chain have accelerated as tariff talks have ramped up. In addition, he commented that overall, organizations are better prepared to work within Trump's policies this time around than four years ago.

"One common theme that we're seeing with clients is that the preparation that predated any of these tariff announcements has been significant," he said. "Many companies were caught more flat-footed during the first Trump Administration when a lot of tariffs were rolled out. There wasn't the same level of focus on really understanding some of the basics."

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