The recent proposed tariffs and the constant negotiations have created a significant degree of uncertainty among businesses. For international suppliers – the exporters – the tariffs could lead to lost customers and cash flow issues if customers can’t afford the tariff hikes. And for U.S. companies importing goods and materials from other countries like China, Mexico, Canada, UK, France and Germany, the tariff hikes will be a costly addition to their expenses, while also creating major supply chain disruptions and inventory problems. In this report, we examine the challenges and impacts of tariff hikes on businesses.
Tariff dodging: 3 in 4 businesses anticipate a rise in trade fraud.
Our study found that 73% of U.S. businesses are worried (to some degree) that higher import duties will drive an uptick in forged documents, mislabeled goods or duplicate payments. In response, nearly half (47%) of the respondents plan to be more diligent about verifying the legitimacy of suppliers they use in the next 12 months.
Cash flow crunch: Half of firms are already paying suppliers late.
As our study reveals, 51% of U.S. businesses reported that the recent tariffs have resulted in delayed payments to suppliers. Of this 51%, 27% are paying their suppliers slightly later than usual and 24% are paying their suppliers significantly later than usual.
Just in case hoarding: Businesses are ramping up inventory buys to ease tariff pain.
Nearly half (48%) of the respondents confirmed they’ve increased their inventory buys. Of that 48%, 34% of the businesses have already increased their inventory buys by up to 25% and another 11% of businesses are increasing their buys by an additional 26-50%.
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