Caught between tariffs and uncertainty, companies weigh stockpiling strategies

Fashion Network

28-04-2025

As the trade war's boundaries keep shifting, companies across industries—from luxury goods to electronics and pharmaceuticals—are debating whether to send additional inventory to the United States, despite the uncertainty complicating their decisions.
Some companies moved quickly, shipping goods to the United States even before the additional tariffs announced by former President Donald Trump were scheduled to take effect on April 2. Although the tariffs were later suspended for 90 days, leaving an extra 10% in place for most countries except China, which remains heavily taxed, many businesses had already accelerated their shipments.
French cosmetics company Clarins was among the early movers. According to Lionel Uzan, president of Clarins North America, "We stockpiled enough for three months, which amounts to about $2 million worth of products. Since all our products are made in France, it's not a model that's easily replicated," he said.
Although few companies admit it openly, the trend spans multiple sectors. In March, Swiss watch exports to the United States—the leading market for Swiss watchmakers—rose by nearly 14% compared to the same month last year.
Planning ahead
Ireland, home to many major multinational pharmaceutical companies, offers an even more striking example. In February, Irish exports to the United States surged by 210%, reaching nearly €13 billion, with approximately 90% made up of chemical and pharmaceutical products.
French furniture manufacturer Fermob sells its designer pieces worldwide, with the United States accounting for about 10% of its annual revenue. The company anticipated the situation months in advance, starting preparations following the outcome of the U.S. presidential election.
"We started planning as early as the fall to ramp up production, especially in January and February," said Baptiste Reybier, managing director of Fermob. "We sent about 30% more inventory to the United States."
The shift in strategy is also evident in freight activity. Lufthansa Cargo recently reported "a rise in demand for shipments to the United States," noting that the trade war "prompted companies to accelerate various stages of the supply chain." The company added that similar trends were observed for car shipments from Europe to the United States.
The trend extends to U.S.-origin exports as well. Japanese daily Nikkei recently reported that major Chinese technology companies stockpiled billions of dollars worth of artificial intelligence chips from American chipmaker Nvidia, anticipating new restrictions from Washington on chip sales to China.
Rapidly outdated goods
However, stockpiling does not come without risks. "We have observed this phenomenon, but with a very opportunistic, short-term approach," said Matt Jochim, a partner at consulting firm McKinsey.
Among the biggest concerns is the risk of shipping goods quickly becoming obsolete and getting stuck in warehouses. "In much of the electronics sector, technology evolves so rapidly that it's better to avoid stockpiling outdated chips or devices," Jochim warned. "You have to decide how far to go carefully. Everything is so uncertain. And it's not just about the latest tariffs—the tariff regimes keep changing," he added.
Fermob, for its part, said it moved cautiously. "Otherwise, you're just swapping one risk for another. Stockpiling ties up financing, and there's always the risk of sending the wrong products," Reybier acknowledged.
"Having a local subsidiary, an office, and warehouses made things easier for us," he concluded. "It's too early to tell whether we should have sent even more."
By Marie-Morgane Le Moel, with AFP bureaus