Executive Briefings

Nike and Ford Caught in Crossfire of Trump's Trade Overhaul

Sneaker producers, automakers and retail giants are facing tumult in their international operations as President Donald Trump pushes ahead with a dramatic overhaul of U.S. trade policy.

His decision not to join the Trans-Pacific Partnership and pledge to renegotiate the North American Free Trade Agreement are forcing companies to rethink supply chains and capital investments in a new era of protectionist policies. Trump's moves weigh heavily on importers such as Nike Inc. and Ford Motor Co. as he seeks to boost domestic manufacturing and create jobs.

“Any company right now that is global is trying to understand what will change,” said Simeon Siegel, an analyst with Instinet LLC, a New York broker. The effect on supply chains, taxes and cost structures “is obviously very much in question.”

Trump last week signed papers that he said would fulfill promises to tackle trade policies immediately after taking office. During the campaign, Trump routinely derided the pacts as job-killers, calling TPP “a potential disaster” and saying Nafta was “one of the worst deals ever.” While the administration didn’t release the documents, the president has said he would prevent U.S. jobs from being outsourced and may impose punitive tariffs on imports.

“A lot of multinationals and industrial companies will be very disappointed about the abandonment of the TPP and will be facing a lot of uncertainty with the renegotiation of Nafta,” said Caitlin Webber, a trade-policy analyst with Bloomberg Intelligence.

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His decision not to join the Trans-Pacific Partnership and pledge to renegotiate the North American Free Trade Agreement are forcing companies to rethink supply chains and capital investments in a new era of protectionist policies. Trump's moves weigh heavily on importers such as Nike Inc. and Ford Motor Co. as he seeks to boost domestic manufacturing and create jobs.

“Any company right now that is global is trying to understand what will change,” said Simeon Siegel, an analyst with Instinet LLC, a New York broker. The effect on supply chains, taxes and cost structures “is obviously very much in question.”

Trump last week signed papers that he said would fulfill promises to tackle trade policies immediately after taking office. During the campaign, Trump routinely derided the pacts as job-killers, calling TPP “a potential disaster” and saying Nafta was “one of the worst deals ever.” While the administration didn’t release the documents, the president has said he would prevent U.S. jobs from being outsourced and may impose punitive tariffs on imports.

“A lot of multinationals and industrial companies will be very disappointed about the abandonment of the TPP and will be facing a lot of uncertainty with the renegotiation of Nafta,” said Caitlin Webber, a trade-policy analyst with Bloomberg Intelligence.

Read Full Article