The US government is very directly linking political demands with trade policy measures.
Companies that export industrial goods, in particular the mechanical and plant engineering and automotive industries, but also the chemical and pharmaceutical industries, are particularly affected by the additional US tariffs. The tariffs imposed by the US government on the import of goods from Europe will therefore place a particular burden on the economies of exporting companies in industrialized countries.
If you export to the USA, you will have to cope with margin losses, regardless of whether you continue to deliver or stop deliveries.
You may feel safe because your company does not export to the US. However, it is possible that some of your customers are US exporters and will experience economic difficulties. Check the extent to which such customer relationships could result in sales risks for your company. Perhaps key suppliers are US exporters who are now facing challenges. Can you rule out the possibility that your suppliers will survive this hurdle?
This new situation gives rise to the following task packages:
1) Try to reach an agreement with your US customers to share the customs burden. The less interchangeable your market services are for your American customers, the greater your chances of being able to enforce such an agreement.
2) If you are unable to reach an agreement with your US customers, check your contracts with these customers to see whether you can discontinue your deliveries.
3) Check whether important suppliers could get into difficulties due to the new customs regulations and, if necessary, look for alternative procurement sources in good time. Consider a certain surcharge as a safety premium.
4) Look for effective measures to significantly increase your operational efficiency quickly in order to remain competitive and profitable despite increased tariffs on US exports. Do you think that nothing more can be done? Our experience is that costs and throughput times can be significantly reduced in any company without compromising quality. The greatest potential lies in the quality of cooperation between departments, i.e. in interface management, and in the orientation of all activities towards the corporate goal.
5) Systematically search for new sales markets that may be able to replace your US business. What is needed is tight business development, including product management strategically aligned to the target markets, a powerful sales organization and sales controlling. The “back end” of your company, consisting of order processing, logistics and after-sales service, must also be quickly aligned with the target markets.
6) Create liquidity reserves by optimizing working capital and/or through additional external financing in order to survive a possible bottleneck phase.
7) It is also worth identifying relevant suppliers from countries whose market performance is subject to significantly higher tariffs imposed by the US government. Depending on the circumstances, companies based in high-wage countries with more expensive energy may be able to export to the US more competitively than Southeast Asian companies due to the current US tariff policy. This opens up new opportunities for suppliers based in high-wage countries!
We are happy to help you in all seven areas in this special situation.