Navigating Economic Shifts: What Businesses Should Know About Tariffs, Trade, and Market Trends.

At Spizzirri Law, we keep a close eye on what’s happening in the broader economy—not because we’re economists, but because our clients rely on us to help them make informed legal and business decisions. Right now, one theme keeps coming up across industries and headlines: uncertainty—especially when it comes to trade, tariffs, and global supply chains. Over the past few months, we’ve seen a sharp pivot in U.S. trade policy, especially regarding Chinese imports. New tariffs are being imposed or expanded, and companies that rely on global sourcing are already feeling the impact.

The Early Effects: Supply Chains Are Slowing, Costs Are Rising

The April jobs report offered some initial optimism, showing 177,000 new jobs. But beneath the surface, there are signs of stress: jobless claims are rising, and factory activity came in weaker than expected.

Many manufacturers are dealing with new headaches. Delays at ports, disputes over who bears the burden of tariffs, and sudden cost spikes are now part of the operating landscape. Some Chinese goods are even being turned away mid-shipment due to the cost of the newly imposed levies. These kinds of disruptions don’t just affect importers—they cascade through operations, pricing, inventory planning, and ultimately customer experience.

Retail and Consumer Spending: A Short-Term Surge, But Long-Term Questions

Interestingly, consumer spending surged in April as shoppers rushed to buy goods ahead of expected price increases. That bump could give second-quarter GDP a temporary boost, but it’s unclear how long that energy will last—especially if prices continue to climb or inventories start to run low.

Retail sales, especially in sectors relying on imports from China, are expected to slow. Online platforms and third-party marketplaces like Amazon may take a hit, along with brands like Temu and Shein that are now losing tariff exemptions on direct-to-consumer shipments. This also means less spending on digital ads—potentially a $5 to $10 billion pullback, affecting businesses far beyond retail.

The Global Economy Is Shifting

Zooming out, this isn’t just a U.S. story. The global economy is entering a slower phase. Global factory activity declined in April for the first time since 2024, especially in Europe and Asia. Export orders dropped, growth in services slowed, and inflation pressures are once again intensifying. Even advanced economies like the U.S., U.K., and Japan are showing signs of strain. While global central banks are watching closely, they’ve been slow to act so far—leaving businesses to navigate inflation, tariffs, and supply chain bottlenecks largely on their own. Still, there are reasons for cautious optimism. The U.S. is making progress on several trade deals—with the U.K., India, Japan, and the EU all in various stages of negotiation. While these won’t yield overnight relief, they signal an effort to build more balanced, resilient trade relationships.

What Businesses Should Be Doing Now

If you’re a business owner, in-house counsel, or decision-maker, here’s what all of this means for you:

• Reassess your supply chains. If you're reliant on Chinese imports or global shipping routes, now is the time to consider diversification and risk mitigation.

• Review your contracts. Ensure you’re protected when it comes to force majeure clauses, tariff-related cost pass-throughs, and vendor obligations.

• Stay close to your numbers. With inflation creeping back up and demand patterns changing, cash flow and pricing strategy are more critical than ever.

• Monitor trade developments. Future trade agreements could open up new opportunities—or create additional compliance requirements.

  
  

At Spizzirri Law, we’re here to help you interpret these developments and act strategically. We bring deep experience from both the public and private sectors—particularly in tax and business law—so our clients get not just technical expertise, but real-world insight into how to navigate moments like this.

Thanks for reading, and feel free to reach out with any questions or concerns regarding these changes.

MD

Reference: The Kiplinger Letter: Forcasts for Executives and Investors-Vol.102, No.20, Pages 1&2