logo
Trump trade war pushes firms to consider stockpiling; analysts call it ‘short-term opportunistic' move

Trump trade war pushes firms to consider stockpiling; analysts call it ‘short-term opportunistic' move

Malay Mail27-04-2025

PARIS, April 27 — Stockpiling is the reflex response by firms to the imposition of tariffs, but with the rapidly-changing position of the Trump administration, companies are finding that it isn't so straightforward this time around.
Whether it's the luxury, electronics or pharmaceutical sectors, US President Donald Trump's unpredictability complicates the calculations of firms.
Some companies didn't wait for Trump's April 2 announcement of massive 'reciprocal' trade tariffs: they had already begun shipping more of their goods to the United States.
In the end, Trump backed down quickly on the 'reciprocal' tariffs, pausing them for 90 days except for China.
That still left the global 10 per cent tariff in place, as well as the 25 per cent tariffs on European steel, aluminium and cars.
French cosmetics firm Clarins didn't hesitate and stepped up shipments to the United States at the beginning of the year.
'We've built up three months of stocks, which represents US$2 million (RM8.7 million) in goods,' said Lionel Uzan, the head of Clarins's US operations.
With all of its products made in France, Clarins had few other options to mitigate the tariffs.
Discreet stockpiling
Even if they don't all acknowledge it so openly, firms in many different sectors are stockpiling their products in the United States.
In March, exports of Swiss watches to the United States jumped nearly 14 per cent compared to the same month last year.
More striking is Ireland, which plays host to a number of international pharmaceutical firms.
Its exports to the United States jumped 210 per cent in February to nearly €13 billion (RM64.7 billion), with 90 per cent of those being pharmaceutical products and chemical ingredients.
Fermob, a French manufacturer of metal garden furniture that sells around 10 per cent of its products in the United States, said it began planning for US tariffs once the result of the presidential election became known in November.
It stepped up production in January and February.
'We've sent around 30 per cent of our extra stock to the United States,' said the company's chief executive, Baptiste Reybier.
That extra production has benefitted transportation firms.
Lufthansa Cargo said it has seen in recent weeks 'an increase in demand for shipments to the United States'.
The trade war 'has incited companies to accelerate certain stages in their supply chains', it told AFP.
'A similar trend was seen for the delivery of cars from the EU to the United States,' it said.
The phenomenon also concerns US-made goods.
The Japanese newspaper Nikkei reported recently that Chinese tech firms were snapping up billions of dollars of artificial intelligence chips made by US firm Nvidia in anticipation of Washington imposing export restrictions.
'Short-term approach'
Stockpiling is not a solution, however, said analysts.
Matt Jochim, a partner at consulting firm McKinsey who helps companies with supply chain issues, called stockpiling 'a very short-term opportunistic' move.
He said the practice has limits as tariffs are constantly changing and it isn't always practicable.
'In a lot of the electronics space, it's also hard to do, because the technology changes so quickly, you don't want to get stuck with inventory of chipsets or devices that are the prior version,' he said.
Fermob said it was taking a measured approach to stockpiling.
'Otherwise, you're replacing one risk with another,' the manufacturer's Reybier said.
'You have to finance stocks and there is also the risk of not having sent the right product.'
Having a local subsidiary with warehouses also helped, Reybier added.
'It's too early to say whether we should have sent more or not.' — AFP

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

France eyes social media ban for under-15s after school stabbing
France eyes social media ban for under-15s after school stabbing

The Sun

time20 minutes ago

  • The Sun

France eyes social media ban for under-15s after school stabbing

PARIS: French authorities have announced plans to ban social media for under-15s and the sale of knives to minors after the murder of a teaching assistant by a 14-year-old boy plunged the country into shock. A secondary school pupil was arrested on Tuesday after killing a 31-year-old school assistant with a knife during a bag search in Nogent in eastern France. 'I am proposing banning social media for children under 15,' President Emmanuel Macron said on X on Tuesday evening. 'Platforms have the ability to verify age. Let's do it,' he added. Backed by France and Spain, Greece has spearheaded a proposal for how the EU should limit children's use of online platforms as evidence shows that social media can have negative effects on children's mental and physical health. Macron said on Tuesday that if no progress was made within several months, then France would go ahead with the ban unilaterally. 'We cannot wait,' he told broadcaster France 2. France has in recent years seen several attacks on teachers and pupils by other schoolchildren. In March, police started random searches for knives and other weapons concealed in bags at and around schools. On Wednesday, Prime Minister Francois Bayrou's office said a ban on the sale of knives to minors will be implemented by a decree issued within the next two weeks. Speaking to broadcaster TF1 on Tuesday evening, Bayrou said that the measure would come into force 'immediately'. The list will include 'any knife that can be used as a weapon', he said. Bayrou has also called for a trial of metal detectors in schools. Education Minister Elisabeth Borne called for a minute's silence to be held in all French schools at midday on Thursday to honour the memory of the teaching assistant. 'The entire educational community is in shock, as is the whole nation,' she told France Inter radio. Borne said she was 'open to anything' to improve safety but added that ceramic blades would be invisible to metal detectors.

China, US Agree On Plan To Ease Trade Tensions After Talks In London
China, US Agree On Plan To Ease Trade Tensions After Talks In London

Barnama

timean hour ago

  • Barnama

China, US Agree On Plan To Ease Trade Tensions After Talks In London

WORLD ISTANBUL, June 11 (Bernama-Anadolu) -- China and the United States (US) have agreed on a framework and implementation plan after two days of trade talks in the UK, China's top trade envoy Li Chenggang said late Tuesday, Anadolu Ajansi reported. 'The two sides agreed, in principle, on the framework for implementing the consensus of the two heads of state in their firm call on the 5th of June, as well as the consensus of the meeting in Geneva,' Li told journalists in London. He said both sides would report back to their leaders on the talks and the framework reached in the UK. Li said the Chinese and US teams worked 'very diligently' and had 'very in-depth exchanges' over the past few days, adding that their communication was 'very professional, rational, in-depth and candid.' He expressed hope that the progress in the talks would be 'conducive to increasing trust' between the two countries, to promote stable trade and economic relations, and contribute positively to global economic development. A new round of trade talks between the US and China aiming to reach a deal started on Monday in London. The talks were expected to revolve around China's restrictions on exports of rare earths to the US and Washington's restrictions on some tech exports to China, as well as the dispute over tariffs. The meeting followed US President Donald Trump's phone conversation with Chinese President Xi Jinping last week, with Trump saying later that the conversation "resulted in a very positive conclusion for both countries." The two sides are aiming to build on a 12th May deal struck in Geneva, when they agreed to a 90-day suspension of most duties and to roll back measures imposed since early April after Trump announced "reciprocal" tariffs on US trading partners.

Musk regrets some of his Trump criticisms, says they 'went too far'
Musk regrets some of his Trump criticisms, says they 'went too far'

New Straits Times

time2 hours ago

  • New Straits Times

Musk regrets some of his Trump criticisms, says they 'went too far'

WASHINGTON: Elon Musk, the world's richest person and Donald Trump's former adviser, said on Wednesday he regretted some of his recent criticisms of the US president, after the pair's public falling-out last week. "I regret some of my posts about President @realDonaldTrump last week. They went too far," Musk wrote on his social media platform X. Musk's expression of regret came just days after Trump threatened the tech billionaire with "serious consequences" if he sought to punish Republicans who vote for a controversial spending bill. Their blistering break-up – largely carried out on social media before a riveted public since Thursday last week – was ignited by Musk's harsh criticism of Trump's so-called "big, beautiful" spending bill, which is currently before Congress. Some lawmakers who were against the bill had called on Musk – one of the Republican Party's biggest financial backers in last year's presidential election – to fund primary challenges against Republicans who voted for the legislation. "He'll have to pay very serious consequences if he does that," Trump, who also branded Musk "disrespectful," told NBC News on Saturday, without specifying what those consequences would be. Trump also said he had "no" desire to repair his relationship with the South African-born Tesla and SpaceX chief, and that he has "no intention of speaking to him." In his post on Wednesday, Musk did not specify which of his criticisms of Trump had gone "too far." The former allies had seemed to have cut ties amicably about two weeks ago, with Trump giving Musk a glowing send-off as he left his cost-cutting role at the so-called Department of Government Efficiency (DOGE). But their relationship cracked within days as Musk described the spending bill as an "abomination" that, if passed by Congress, could define Trump's second term in office. Trump hit back at Musk's comments in an Oval Office diatribe and from there the row detonated, leaving Washington stunned. "Look, Elon and I had a great relationship. I don't know if we will anymore. I was surprised," Trump told reporters. Musk, who was Trump's biggest donor to his 2024 campaign, also raised the issue of the Republican's election win. "Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51–49 in the Senate," he posted, adding: "Such ingratitude." Trump later said on his Truth Social platform that cutting billions of US dollars in subsidies and contracts to Musk's companies would be the "easiest way" to save the US government money. US media have put the value of the contracts at US$18 billion. With real political and economic risks to their falling-out, both appeared to inch back from the brink on Friday, with Trump telling reporters "I just wish him well," and Musk responding on X: "Likewise." Trump had spoken to NBC on Saturday after Musk deleted one of the explosive allegations he had made during their fallout, linking the president with disgraced financier Jeffrey Epstein. Musk had alleged that the Republican president is featured in unreleased government files on former associates of Epstein, who died by suicide in 2019 while he faced sex trafficking charges. Trump was named in a trove of depositions and statements linked to Epstein that were unsealed by a New York judge in early 2024. The president has not been accused of any wrongdoing in the case. "Time to drop the really big bomb: (Trump) is in the Epstein files," Musk posted on X. "That is the real reason they have not been made public." Musk did not reveal which files he was talking about and offered no evidence for his claim.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store