U.S. Businesses Expect High Tariffs to Persist Long-Term, Accelerating Supply Chain Restructuring
Claire Weston
A growing number of US executives now treat high tariffs as permanent, expecting them to outlast the current administration; that bet is driving an accelerating, and increasingly irreversible, shift of supply chains away from China.
Why do businesses believe high tariffs will stick?
The core logic is money: US tariff revenue now runs $20–30 billion a month, and Yale Budget Lab's John Iselin says no incoming government will easily walk away from that.
This means → tariffs have become more than a trade tool — they are a steady fiscal pipeline, and politicians rarely shut off a revenue tap voluntarily.
History backs the bet: the Biden administration never rolled back the tariffs Trump imposed in his first term, suggesting party affiliation matters less than the revenue stream.
How much higher are tariffs now versus before?
Under Trump's second term, the effective tariff rate — duties collected as a share of total imports — briefly hit nearly 11%, and has since settled around 7%.
By comparison, the first-term peak was roughly 3%; Biden held it at about that level.
In plain terms = jumping from 3% to 7–11% is not a tweak — it is an order-of-magnitude shift that permanently rewrites corporate cost structures.
What are companies actually doing about it?
Off-road vehicle maker Polaris plans to cut its China-sourced share of total cost of sales to below 5% by end-2027; CEO Mike Speetzen says the move should yield meaningful savings if tariffs hold.
Australian accessories maker ARB concluded as early as last autumn that Washington would not abandon tariffs, and began repositioning its business for the long term.
This reflects a broader reality: supply-chain restructuring is no longer a wait-and-see exercise — it is already being executed as settled strategy.
How are foreign automakers responding?
Foreign carmakers are among the hardest-hit groups; several have announced plans to expand US-based production.
Jennifer Safavian, CEO of lobby group Autos Drive America, says the push toward domestic manufacturing will persist regardless of future tariff policy.
This means → for automakers, "reshoring to the US" has shifted from a policy-forced reaction to a self-selected strategy — even if tariffs ease, capacity will not move back.
Will the 2028 election change anything?
On the Republican side, JD Vance and Marco Rubio frame tariffs as tools for fair trade, signaling clear support for continuation.
Democrats are more divided: Gavin Newsom calls tariffs "illegal profiteering," Kamala Harris argues they raise the cost of living, and Pete Buttigieg questions whether they have actually boosted manufacturing jobs.
In plain terms = even a Democratic administration may not scrap tariffs wholesale — Biden's precedent already proved that; the real variable is how high the rate stays, not whether tariffs exist at all.
Content is for reference only, not financial advice.