The first impact is the Lexus effect, which is when Chinese export products increase their quality in response to tariffs. Japan’s Lexus was so high-quality that even with high tariffs, it still represented better value for money than its US auto competitors.
Incoming US President Donald Trump has announced that he will impose higher tariffs on China from day one. “We will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” he wrote on his media platform.
Tariffs distort trade, supply chains and the global economy, often causing collateral damage to other industries and businesses. Even if the link between China and the US seems distant, it’s crucial to assess the potential impact on your business.
