Tariffs, Trade, and Trump: Operating in Uncertainty

At this year’s Catalyze conference in Chicago, Omar Nashashibi, a seasoned Washington D.C. lobbyist with over 25 years of experience led an insightful session on the unprecedented state of U.S. tariffs and trade policy. His message was clear: the rules of global commerce are shifting fast, and businesses need to be ready.

Here are a few key takeaways from this insightful session to help you navigate the murky waters of tariffs and trade.

Tariffs: A Powerful (and Risky) Policy Tool

The session began by unpacking how the Trump administration has been using tariffs aggressively as part of its global trade policy, often stretching legal boundaries to impose them. From sweeping tariffs on Chinese goods to deals in the works with other global partners, the landscape has grown more complex and unpredictable.

The message for businesses: don’t assume today’s rules will be tomorrow’s reality.

Nashashibi made it clear that this time around, trade decisions are being made at lightning speed — sometimes literally overnight. “You’ve got to develop systems to determine your exposure and your risk, not just for yourself but for your customers,” he warned. “And those systems must be flexible, what’s true at 10 a.m. may not be true at 10 p.m.”

Perception vs. Reality: The Real-World Impact

Tariffs aren’t just abstract policy moves, their effects ripple through supply chains, pricing, and sourcing strategies, impacting businesses in a multitude of ways. Omar highlighted how tariffs imposed on exports from China, Vietnam, Thailand, and the EU have had unexpected consequences, even hitting trade partners like Canada and Mexico under USMCA.

Omar's advice: "Whatever you build today, be flexible for tomorrow." That means designing supply chains that can pivot when necessary and staying ahead of policy changes that could impact access or costs.

He also noted that tariffs are being applied on more than just products, they’re now hitting transportation modes and vessels. “He’s tarring the vessel, he’s tarring the product, and he’s tarring the country,” Nashashibi said, summarizing how deep the new tariff regimes are reaching into logistics and infrastructure.

Trade Agreements Are a Moving Target

While the global trade environment may feel chaotic, there are reasons to be optimistic. Businesses can stay resilient if they stay informed. Throughout the session, Omar highlighted the ongoing complexity of international negotiations, the influence of the U.S. Supreme Court, and the ever-shifting web of regulations.

One essential tool he spotlighted is the Harmonized Tariff Schedule (HTS) code. Knowing your HTS codes is essential for businesses affected by tariffs, allowing you to identify product exemptions and anticipate cost impacts.

Nashashibi urged businesses to stop thinking in terms of SKUs and start thinking in HTS codes: “The U.S. government maintains over 3.1 million codes at the 10-digit level. If you don’t know your code, you don’t know your risk.”

Tariff Rates: High Stakes for Key Industries

The numbers shared during this session were truly eye-opening, with tariffs on Chinese imports ranging anywhere from 25% to 170%. Steel, aluminum, pharmaceuticals, and the automotive industry are already feeling the squeeze and there may be even more tariffs and trade regulations on the way.

Understanding why these tariffs are imposed, how they’re enforced, and what your business can do to adapt is critical to staying competitive.

Nashashibi pointed out that the administration is leveraging multiple legal authorities to apply tariffs: the International Emergency Economic Powers Act (IEEPA), Section 301, and Section 232, among others. Each carries different requirements, and some (like Section 232 for national security) are virtually immune from Congressional oversight.

And that’s the strategy: “Trump’s not just using one trade law, he’s using all of them,” said Nashashibi. “That gives him room to maneuver and complicates the challenge for businesses trying to respond.”

Could IP Be Next?

One troubling development that has arisen in recent days is the prospect of tariffs on intellectual property — even on U.S. movies and entertainment. While this proposal remains a hypothetical for now, such a move could set off a chain reaction of retaliatory tariffs on U.S. services and exports.

It’s a stark reminder: tariffs are no longer limited to physical goods; the digital and creative economies could be next in line.

The implications of such a move could be enormous, affecting not just Hollywood but global service exports, from software to engineering. “We’ve never seen a president attempt to tariff intellectual property before,” Nashashibi warned. “It would be a dangerous precedent.”

Duty Drawback: A Partial Safety Net

When asked about ways to recover paid tariffs, Omar introduced the concept of duty drawback, a little-known process that allows businesses to claim refunds on certain duties and taxes for goods that are exported or destroyed.

While it offers some relief, reclaiming these costs isn’t easy. The process is complex, and enforcement is often limited by agency resources. In most cases, duties are paid as goods enter U.S. ports and must be managed through customs brokers leaving businesses to do the heavy lifting.

The Enforcement Gap — and the Strategic Opportunity

Nashashibi also noted a significant challenge: enforcement. “Customs doesn’t have the resources to track everything. Commerce doesn’t have the staff. The Trade Representative’s office only has 250 people. They’re flying blind.”

While this chaos creates risk, it also creates opportunity for companies that do their homework. “You can win by outrunning the bear,” he said. “If your competitors are exposed and you’re not, you have leverage.”

Looking Ahead: Tariffs, Trade, and Global Shifts

The session wrapped with a broader perspective on where all of these tariff developments might lead. The U.S.-China relationship, shifting alliances, and the sustainability of current trade practices all point toward continued volatility. So how can businesses stay ahead of the curve?

• Audit your tariff exposure: Know your HTS codes, suppliers’ countries of origin, and the potential costs of each tariff scenario.

• Build supply chain agility: Diversify sourcing, add redundancies, and create flexibility in your contracts.

• Engage with policymakers and associations: Many businesses were caught off guard by past tariff moves. Stay plugged into trade associations, Chambers of Commerce, and policy updates.

• Leverage technology: Tools that provide real-time trade and pricing data, customs classifications, and cost modeling are critical.

• Prepare senior stakeholders: Tariffs are now strategic risks. CFOs and CEOs must understand their potential financial impacts and regulatory timelines.

For supply chain professionals, the message is clear. Stay informed, stay flexible, and stay prepared. As Omar Nashashibi reminded the audience, “Tariffs are here to stay. The question is on whom, for how much, and for how long.”

Because when it comes to tariffs, it’s not a matter of if—but when.

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