How new tariffs affect prices and supply chains in Arizona

As tariffs start to take hold, where will consumers see the price hikes, and how much? Also, people are starting to stockpile goods out of fear, such as toilet paper and canned items. Can this cause a supply issue due to panic and overbuying? What do Arizonans need to know?

Eddie Davila, Assistant Chair of the Department of Supply Chain Management at the W. P. Carey School of Business at ASU, joined “Arizona Horizon” to discuss.

The most popular items that are expected to be affected by these tariffs, according to Davila, are the electronic and industrial goods, as well as clothing coming in from China.

“The first thing we have to understand is that, ultimately, this first phase, the tariff is going to impact the price of bringing it into the country alone. A lot of the architecture of your supply chain isn’t going to be disrupted right away,” Davila said.

When fuel or groceries start to rise, that is when consumers will be affected by the tariffs, according to Davila. However, a large industry that is expected to be impacted is the port industry. He is unsure what the real outcome will look like; it will depend on the ports’ choices to either get ahead of stored goods or wait to see the effect of the tariffs.

“If I’m working with a supplier in Vietnam, let’s say, and I have a relationship with them, that relationship has been disrupted, and I don’t know if I can use you anymore. Oh wait! I can use you, but now with a 90-day holdover, for these next 90 days. I think that they’re exploring other options and I’m exploring other options too because we have no idea what’s going to happen,” Davila said.

He said there is a trade-off happening with the tariffs being introduced: The U.S. will start making everything themselves or making deals and having tariffs and losing some products along the way. Some businesses are remaining steady, and there are others preparing for the tariffs to affect them quickly.