Corporate strategy shaken under volatile US tariff policies

Editor's note：Liu Qiang is a research fellow at the Academy of Financial Research, School of Economics of Zhejiang University of China. Ma Xinxiao is an associate professor at the College of Management, Ocean University of China. This article reflects the authors' views and not necessarily those of CGTN.

The Trump administration officially launched a tariff refund system on April 20 local time, aimed at reimbursing importers $166 billion in tariffs that the US Supreme Court ruled "unlawful" in February.

The frequent adjustments to US tariff policies in recent years have subjected the global trade environment to persistent uncertainty. Whether it's tariff hikes, exemptions, or phased cancellations, the policy volatility itself has become a major factor disrupting corporate decision-making. Even as some tariff measures are eased, cautious sentiments regarding supply chain configuration, order planning, and market expectations have not dissipated. Meanwhile, discussions around "new trade instruments" concerning industrial security, technology restrictions, and carbon border adjustments are intensifying, indicating that hidden costs beyond traditional tariffs will continue to hinder the normal operation and development of businesses.

Policy volatility undermines trade system stability

The capricious nature of US trade policy, essentially a result of its domestic political gamesmanship and the spillover of economic nationalism, severely undermines the institutional stability and predictability of the global trading system. Policy "U-turns" not only directly distort the flow of goods and factors of production but also send strong signals of policy uncertainty to the market. To hedge against risks, enterprises are compelled to factor "policy shock costs" into their core considerations, leading to dampened long-term investment appetite and reduced efficiency in global resource allocation. This "ripple effect of rules" triggered by the largest economy has shaken the foundations of the multilateral trading system centered on the WTO, forcing countries and businesses to seek more predictable alternatives.

Diverse layouts and agile operations for corporate resilience

In a volatile environment, enhancing resilience has become a primary task for corporate survival and development. Supply chain strategies are shifting from globally optimized layouts for maximum efficiency towards regionalized layouts that balance security and resilience. Leading companies can diversify risks by adding backup suppliers, establishing regional manufacturing hubs, and increasing inventory levels of critical components. On the market front, companies are actively diversifying their markets to reduce dependence on a single one. China's inclusive industrial system and the deepening of the Belt and Road Initiative provide key support for global enterprises to optimize their worldwide footprint.

Trade barriers moving beyond tariffs to rules and standards

In the future, the forms of trade protectionism will become more complex, shifting from direct tariff instruments to "rules-based barriers" centered on technical standards, data security, labor and environmental protections, and carbon footprints. Policies like the EU's Carbon Border Adjustment Mechanism are stretching to rule-making. These structural barriers have higher thresholds and involve more complex compliance costs, which will profoundly impact the reshaping of global industrial chains. Businesses must shift from passively reacting to tariffs to proactively adapting to and even helping shape future product standards.

Long-term vision and independent innovation for development initiative

Facing the new normal of uncertainty, enterprises need to build long-term strategic capabilities that transcend policy cycles. This includes increasing investment in R&D and achieving greater self-reliance and controllability in core technologies to build a "moat" through innovation; advancing green and low-carbon transition to gain market access advantages by aligning early with international environmental rules; and leveraging digital technologies to enhance supply chain transparency and responsiveness. Only by transforming external pressures into drivers for internal upgrading can companies seize the initiative amid shifting rules.