How Trump's Tariff War Has Affected Global Supply Chains
Source:
• Author: David Silverberg
• Role: BBC Business Affairs Reporter, Reporting from Toronto
• Date: July 8, 2025
The 90-day suspension of President Trump's massive tariff plan is set to expire on Wednesday (July 9), a tariff strategy that could disrupt trade relations between the U.S. and the rest of the world. However, the uncertainty over the past few months has forced many companies to rethink their supply chains in radical ways.
When a toy manufacturer from Illinois learned that Trump would impose tariffs on imports from China, he was infuriated and decided to sue the U.S. government.
"When my company is really in crisis, I tend to step up," said Rick Woldenberg, CEO of the educational toy company Learning Resources.
Most of his company's products are manufactured in China, so the tariffs paid by U.S. importers (rather than Chinese exporters) have caused him significant losses.
He stated that when Trump temporarily raised tariffs on Chinese imports to 145% in April, his 2025 import tax bill was expected to skyrocket from about $2.5 million (approximately £1.5 million) in 2024 to over $100 million. He said this would "destroy" the entire company.
"The impact of this on my business is simply unbelievable," he said.
Even though the current U.S. tariffs on Chinese imports have dropped to 30%, it remains difficult for American companies like Learning Resources to bear.
Therefore, in addition to ongoing legal battles, the company is also changing its global supply chain by moving production from China to Vietnam and India.
These two countries, like most others in the world, are currently subject to a 10% base tariff by the U.S., which is two-thirds lower than the tariff on China. Although these 10% tariffs are expected to expire on July 9 (Wednesday), it remains uncertain whether they will be replaced by other measures.
Meanwhile, many Canadian companies—typically engaged in trade both domestically and with the U.S.—are now facing a double blow to their supply chains.
These blows include the 25% tariffs imposed by Trump on many Canadian imports, as well as retaliatory tariffs implemented by Canada on several U.S. exports.
Additionally, other businesses around the world are beginning to consider reducing exports to the U.S. because their American import partners have had to raise prices to cope with the tariffs, making their products more expensive in the U.S. market.
Woldenberg's Learning Resources has currently shifted about 16% of its manufacturing business to Vietnam and India.
He stated, "We have completed the review process for new factories, trained them on what we need, ensured smooth processes, and established partnerships."
However, he also admitted there is some uncertainty: "We don't know if they can handle the capacity of our business, let alone the influx of other global companies."
He pointed out that moving production to other countries is an expensive and complex arrangement.
Meanwhile, his lawsuit regarding U.S. tariffs is still ongoing in U.S. courts.
In May, a judge in the U.S. District Court for Washington, D.C. ruled that the tariffs against the company were illegal. However, the U.S. government immediately appealed, so the company still has to pay the tariffs.
The company continues to shift production away from China.
Global supply chain expert Les Brand stated that shifting manufacturing to other countries is both expensive and difficult.
"Finding new sources for the critical components you produce requires a lot of research," said Mr. Brand, CEO of the consulting firm Supply Chain Logistics.
"To do this well, extensive quality testing is also needed. You have to invest time, which diverts focus from running the business."
He added, "Transferring knowledge to a whole batch of new employees, teaching them how to manufacture your product, takes a lot of time and money. This affects the already thin profit margins of businesses."
For Canadian fried chicken chain Cluck Clucks, Canada's retaliatory tariffs on U.S. imports have had a significant impact on its supply chain. Although their chicken comes from Canada, their specialized refrigeration units and pressure fryers are imported from the U.S.
While the refrigerators are essential, they have decided not to purchase more pressure fryers. However, since no Canadian companies produce alternatives, they have had to reduce menu items at newly opened locations.
This is because they need these pressure fryers to cook bone-in chicken. The new locations will only be able to sell boneless chicken due to different cooking methods.
Cluck Clucks CEO Raza Hashim stated, "This is a significant decision for us, but we believe it is the right strategic choice."
He added, "It’s worth mentioning that we do plan to keep the necessary kitchen space in the new locations to reintroduce these fryers once the uncertainty around tariffs is fully resolved."
He also warned that as the cost of U.S. refrigerators rises, the company may have to increase meal prices in the future. "As a brand, we cannot absorb all the costs; we may have to pass some of them on to consumers. This is not what we want to see."
Hashim added that the company is still advancing its expansion plans in the U.S. and has established a local supply chain to source U.S. chicken. They currently have one location in the U.S., in Houston, Texas.