The ripple effect of U.S. Tariffs: What business are seeing so far

The recent announcement of new U.S. tariffs has sent waves through global trade, even before they officially take effect. While the full impact remains to be seen, businesses across various industries are already making adjustments—some out of necessity, others in anticipation of potential disruptions.

At Xe, we work with businesses of all sizes that rely on international payments and foreign exchange, giving us a front-row seat to how the market is reacting. Here’s what we’re hearing from our clients about the immediate and potential effects of these tariffs.

1. Increased costs are industry-dependent

For businesses operating on thin margins, a 10% or 25% tariff can make a significant difference. Importers and exporters in industries such as equipment, vehicles, durable goods, and agriculture are already evaluating their options—some are exploring alternative suppliers, while others are reconsidering whether certain lines of business will remain viable.

2. Supply chain risks are growing

Like cost increases, supply chain concerns are hitting hardest in lower-margin industries. Some businesses are rethinking logistics strategies, assessing risks, and determining whether they need to shift sourcing strategies now or wait and see how the situation unfolds.

3. Currency fluctuations are changing the competitive landscape

While tariffs have yet to be implemented, the mere prospect of them has already strengthened the U.S. dollar beyond typical market fundamentals. This, in turn, is affecting business competitiveness, particularly for companies outside the U.S. that need to purchase USD. Canadian businesses, for example, have expressed concern that while they can adapt to tariff-related costs, managing a devaluing CAD against a stronger USD is a bigger challenge.

4. Profitability is taking a hit

The rising USD has created winners and losers. Some businesses are benefiting from the shift, while others—particularly those that need to buy USD—are facing a real financial shock. This has made profitability harder to manage, especially for companies that operate with narrow margins.

5. Market diversification may become a necessity

Many businesses are considering diversifying their markets to mitigate risk. However, those with tighter profit margins are feeling the pressure more immediately, as currency volatility and shifting costs make some markets less attractive or even unsustainable.

6. Consumer behavior remains unchanged—for now

So far, businesses are not reporting any significant shifts in consumer behavior. However, if tariffs begin to influence product pricing, that could change.

7. Administrative costs are already using

Even though compliance costs haven’t kicked in yet, businesses are already spending time and money navigating the uncertainty. Many are consulting with lawyers, freight forwarders, and financial advisors to understand how potential tariffs might affect them. One equipment broker we spoke to faced a difficult decision: ship a product missing a critical part to avoid potential tariffs and incur installation costs later, or wait and risk higher costs if tariffs go into effect? These kinds of strategic choices are becoming more common.

8. Uncertainty is the biggest challenge of all

The one universal truth? Uncertainty. Across industries, businesses are grappling with an unpredictable landscape, making it harder to plan, invest, or operate with confidence. Whether a company supports or opposes these tariffs, the speed and scale of potential changes are adding complexity to an already challenging global trade environment.

What’s next?

The situation is evolving, and businesses are keeping a close eye on developments. At Xe, we’re committed to helping businesses navigate currency fluctuations and international payments efficiently—because in times of uncertainty, every dollar and every decision matters.

Stay tuned for further updates as we track the impact of these tariffs in real time.

Note: This analysis is based on current information and may evolve as new data emerges.

Managing uncertainty with Xe

In times of uncertainty, businesses need more than just information—they need strategies that help them stay ahead of market fluctuations. While tariffs and shifting currency values may be outside of a company’s control, managing foreign exchange risk isn’t.

For businesses engaged in cross-border transactions, having the right FX approach and strategy can turn volatility into opportunity. Tools like forward contracts, market orders, option contracts, and rate alerts allow businesses to mitigate currency risk and protect their bottom line.

At Xe, we work with businesses to develop tailored FX strategies that align with their goals. By understanding the risks and using the right tools, you'll be able to focus on what really matters: growth, stability, and long-term success.

Here are a few of our tools that can help:

Forward contracts

Lock in a rate today and schedule your transfer for a future date. This tool gives your business certainty no matter how the market moves. Learn more here.

Market orders

With a market order, we keep a close eye on the markets 24/7, so you don't have to. Just tell us your target rate, and we'll notify you as soon as it hits or execute the order automatically. Learn more here.

Option contracts

Our risk management team can help you explore the option to buy or sell a currency at a set rate on a future date. These contracts provide a level of protection from the market with added flexibility.

Rate alerts

Get notified when a currency exchange hits your desired rate. Rate alerts enable you to stay on top of your chosen exchange rate with no obligation. Set up a rate alert here.

The content within this blog post is not intended for use as financial advice. This content is for informational purposes only.