by Saiqa Anne Qureshi, Staff Writer, FWSF MarCom Committee
On Wednesday, May 21, 2025, the Financial Women of San Francisco, in partnership with the Financial Women of New York, hosted a webinar on tariffs, clarifying what has been announced, paused, and currently implemented. The panel, moderated by Anagha Vaidhyanathan, Executive Director in Sales at Morgan Stanley, included: Dana M. Peterson, Chief Economist and Leader, Economy, Strategy & Finance Center, The Conference Board; Jeff O'Conner, U.S. Head of Market Structure and Sell Side ATS Strategy, Liquidnet; Jessica Libby, Principal, KPMG; and Monika Garg, NicTech PM, Nicholas Investment Partners.
The panel of experts clarified actual policies and discussed their potential impact on the overall economy and spillover into everyday finances. They looked at this defining policy shift, considering financial impact as well as the impact of geopolitical fallout.
The panel agreed that fundamentally the US economy is fine, with almost full employment, a decrease in inflation, and strong markets, however there is increased uncertainty and concerns about the impact of potential increases on costs and maybe holding off on additional hiring. Looking forward, trade is down, consumer confidence is down, and planned spending is also forecast to be down. There may not be a recession, or an increase in unemployment, but there may be an increase in inflation. Additionally, the debt ceiling will come into play again in the later summer, as it will need to be increased and a budget agreed in August.
In terms of trading ties and impacts, the tariffs on China could impact US growth negatively, even modeled to consider tariffs at only 30%. The current attempts to reorient the US economy towards manufacturing and creating exports, and away from consumer spending, is causing doubt with US allies, and creating potential shifts in political alliances as well. The instability is not good economically, and we already had some tariffs and increased them, and that is limiting economic growth due to a reduction in trade. This is hitting people’s pocketbooks as prices are already escalating and tariffs will make everyday items more expensive and are expected to lead to a reduction in spending.
Prior to January 2025 the average duty rate was 2.7% and that jumped to the mid 30%, on “Liberation Day,” and that is now down to about 27%, but that is still a 25% increase in three months on imports to the United States. We are in a 90 day cooling off period, but there are additional 20-25% rates, over the base 30%, on key items like steel, and those still add up to over 50%. In the last few weeks, the tariffs have started to hit the items coming into the ports and the volumes in those ports, like the ports of LA and Long Beach, are seeing a decrease in port activity. The overall decrease in port volume indicates that the consumer will start to experience the impact for “back to school” shopping, that traditionally starts after 4th of July. Families start to get ready for kids who are back to school and shopping includes school supplies, clothing and shoes, with large percentages of those items coming from China. Some vendors have indicated they will hold prices, and some have indicated that they won’t sell certain items as the margin on those goods doesn’t make economic sense, so the tariff is an effective embargo.
The current port volume is below the volume during covid, a time period in which we did have significant shortages. Many companies are working on mitigation strategies, and many companies are using customs bonded warehouses, so the duty isn’t paid yet, and paid when the items are needed. A lot of freight is sitting, waiting for a decrease in tariffs to be pulled out. They are also using “first sale for export,” as a strategy, which allows an importer to sell to a middleman and use the lower price as the import value for sale. In the first three months of this administration, there were 55 policy changes in trade, and that has led to an increased need for data.
The key theme is a lack of ability to plan due to uncertainty and the impact of investment decisions. Supply chains are deeply interconnected and there isn’t a way to strictly avoid tariffs at this time, and moving production isn’t a simple solution that can be engaged overnight. Interestingly the last administration had incentives to attempt to “on shore” production in tech, back to the United States, and the Trump administration has not introduced the same volume of programs to incentivize production in the US. Beyond that, even investment from the Biden Administration could be years away from production that would affect consumer products. Tariffs on components of technology will lead to increases in overall cost to the customer, as margins are not that large on these devices, including smart phones and laptops.
As we are now about halfway into the 90 day period, there have been adjustments in terms of behaviors to manage what we are seeing. There is now a consideration of “regional” agreements, rather than individual agreements for each country, and a focus on the top 18-20 trading partners with specific country agreements. It is not clear if an agreement isn’t in place by July, if the tariff rate adjusts to 10% or a much higher rate, from “Liberation Day.” Prior to July there could be another “rush to buy” in advance of uncertainty around what could happen.
From Connections Newsletter (Past Event Highlights): June 2025
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