Altana CEO Explains Hidden Tariff Impacts on Electronics and Autos

Understanding Modern Tariffs

• 💡 Historically, tariffs were seen as a last-mile tax applied only when a product entered the country.
• ⚠️ The novel aspect of current trade policy is tariffs applied to components and raw materials within a product's value chain, not just the finished good.
• 🔍 This requires companies to understand their entire extended supply chain to accurately calculate tariff costs.

Economic Shocks from Tariffs

• 📈 The accumulating costs of tariffs across global value chains are leading to significant earning shocks and inflation shocks.
• 🧩 This is akin to taxing the flour and sugar for a muffin, rather than just the finished muffin itself, impacting costs incrementally.

Corporate Adjustments to Tariff Costs

• 💰 Companies are experiencing increased cost pressure from suppliers who are requesting price increases.
• 🤝 Some companies are using data and analytics to negotiate prices based on the actual tariff increases impacting their supply chain.
• 💸 These cost adjustments are working their way through the entire chain, affecting end customers and corporate earnings.