The world’s biggest business leaders talk ‘tariff man’ Trump

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We have entered phase two of the Trump tariff concerns among the upper echelon of power brokers at the world’s biggest companies.

I would loosely characterize phase one as a shell-shocked, bantering state that emerged in the seven days after this month’s election.

Leaders I talked to in the election’s aftermath were still trying to process the outcome and what it meant in the near term to their workers and businesses. Not many were sure if Trump would make good on his litany of head-scratching promises — and if they did have a view, they had no intention of sharing it on the record with yours truly.

As a reminder, Trump has floated 60% or higher tariffs on China and up to 20% on most goods out of other countries.

Now, welcome to phase two, where leaders are beginning to speak publicly on the issue and work connections behind the scenes in an attempt to change the president-elect’s mind on tariffs.

“I’ve also spent time with our team talking about, OK, when something is announced, we want to be doing pricing actions with our customers of some magnitude. And so we’ve actually started to have some of those conversations with our channel customers in the last week or two,” Stanley Black & Decker (SWK) CEO Don Allan told me this week on Yahoo Finance (video above).

“We won’t do anything until we see something that says, here’s what the new world of tariffs is going to be.”

Allan said he’s been spending time with politicians and people close to the incoming Trump administration to help them understand the detrimental impact of potential tariffs.

Explained Allan, “When I look at our industry, if I took our Chinese operation that we have today that makes power tools and brought it over in the US, the cost to make that product would be about 60% to 70% higher. So it’s substantial, which the consumer will not pay for. And so if we’re going to reduce our China exposure, which we are, we’ll be looking at other Southeast Asian countries like Vietnam or maybe Mexico, where we certainly have a significant operation already.”

Allan’s worries about tariffs are being echoed elsewhere.

“Look, if [tariffs do] happen, it would create macroeconomic implications, and it would likely be in the form of additional inflationary pressures on consumers. But it’s also important to note we have increased flexibility to continue to evolve our supply chain, and we’ll ensure we’re in the strongest possible position as trends unfold,” Gap (GAP) CEO Richard Dickson told me on the phone after another quarterly earnings beat.

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