US businesses stocking up to prepare for looming Trump tariffs

Mr. Rick Muskat woke up the morning after the US presidential election with an urgent task. He got his agent in China on the phone at 4:30 a.m. Beijing time and pressed him to ask their factory how many more pairs of men's dress shoes they could make before Chinese New Year, at the end of January.

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"I told them if they could make an additional 30,000 pairs, we would take them," Mr. Muskat, the co-owner of a shoe company called Deer Stags, said.

The impetus was not a sudden jump in demand for shoes but the looming threat of steep tariffs on Chinese products. By stockpiling now, Mr. Muskat reckoned, his company could avoid at least some of the levies that President-elect Donald Trump has promised to impose when he takes office in January. "We're going to take whatever they can make," Mr. Muskat said.

The election of Trump is already cascading through global supply chains, where companies are grappling with his promises to remake international trade by raising the tariffs the United States puts on foreign products. Trump has floated a variety of plans - including a 10 to 20 percent tax on most foreign products and a 60 percent tariff on goods from China - that would raise the surcharge American importers pay to a level not seen in generations.

Much remains unclear about his proposals, including which countries other than China would face tariffs, what products might be excluded and when they would take effect. But given Trump's history of imposing taxes and the challenges those pose to global firms that depend on moving products across borders, many executives are not waiting to see what he does.

Some, like Mr. Muskat, are preparing to stock up their US warehouses before tariffs might go into effect. Others have been accelerating plans to move out of China, reaching out to lobbyists and lawyers in Washington and calling board meetings to discuss what the tariff threats could mean for their firms.

As major retailers reported earnings this week, analysts questioned them about the impact that tariff increases might have on their profits. Some downplayed the threats: Mr. Oliver Zipse, the chief executive of BMW, said tariffs might be only "a verbal issue."