March 17, 2025
Our first Brand Advisory Board of 2025 started with a timely discussion about the impact of President Trump’s tariffs on the global markets with POLITICO Europe’s Senior Trade Reporter, Graham Lanktree.
Following a tumultuous couple of days of rapidly evolving news on tariffs, shifting trade relationships, and the ensuing stock market chaos, Lanktree gave an insider’s view of what it all means. The discussion focussed on the potential impact of these decisions on the economy and consumer spending, and how businesses are scrambling to adjust.
Unpredictable trade policies
Lanktree outlined the unpredictability of President Trump’s trade policies: “At the start of last week, we saw the 25% tariffs on Canada and Mexico come into effect. Both were very quickly rolled back a little over 48 hours later, with some exemptions for goods that were covered under the trade deal that the US has with Canada and Mexico. There are a lot of other goods included in that, but nobody really knows what. So it’s confusing for exporters and all kinds of businesses,” he said.
We can expect the confusion to continue. On 2nd April, the US plans to introduce ‘reciprocal tariffs,’ meaning it will match the tariff levels of other countries. For example, India has a 150% tax on alcohol, so if the US follows through, the result could be the same tax on Indian alcohol imports.
Far from creating economic stability, the stock market reacted dramatically to the news. ”There’s been about 4 trillion wiped off the US stock exchange,” Lanktree said. Consumer confidence has also taken a nosedive, hitting a four-year low in February, and this is even before the new tariff changes were announced.
Consumer jitters
JP Morgan and Goldman Sachs have already predicted inflation and slower economic growth as a result of these unpredictable policies. Lanktree recently spoke to a University of Chicago professor about the impact on consumer confidence. “His research shows that when consumers expect rising prices, they change spending habits, fueling economic slowdown before tariffs even take full effect,” Lanktree explained. This self-fulfilling prophecy of economic slowdown is likely to affect business and marketing strategies in the coming months.
Anti-US sentiment
Lanktree talked about how other countries are reacting to the news about tariffs. In Canada, he said, there’s a growing consumer movement against American products with a billboard in Toronto advertising Cheese Strings as “0% American cheese.” In Ontario, liquor stores have removed Jack Daniels from their shelves.
The Swedish EV company Polestar is capitalising on the shifting trade policies, offering Tesla owners a €5,000 rebate to switch to their brand. In the rest of Europe, retaliatory tariffs are likely. This could be bad news for brands like Diageo, which are bound by geographical indicators for production and rely on cross-border trade.
Is Brexit finally paying off?
Thanks to Brexit, the UK may be in a better position to move quickly and strike a beneficial trade deal with the US. “They’re taking these tariffs on the chin, not rocking the boat, while the EU is retaliating,” Lanktree said. The hope is that by staying on good terms with the US, the UK can negotiate a favorable trade deal, particularly focussing on technology and AI.
But there’s a downside. The UK economy is already feeling the pinch, with slower growth expected due to decreased demand for British exports. Services like legal and financial consulting are also taking a hit, with fewer companies making big cross-border deals that require those services.
Will Trump’s tariffs work?
The hope behind the introduction of all these tariffs is that they’ll drive manufacturing back to the US, but Lanktree is skeptical. The pandemic caused companies to shift production away from China, but instead of moving to the US, Lanktree said there’s been an increase in countries like Vietnam and Mexico. Adding to that, higher costs and economic uncertainty make the US a difficult place to invest. If people have less money to spend and inflation is rising, companies might hesitate to bring manufacturing back.
Are businesses prepared?
Lanktree said that some companies he talks to have well-prepared contingency plans, while others are scrambling. Trade consultants are in high demand as firms try to map out different scenarios and prepare for what’s coming next.
Some of our Brand Advisory Board members are already seeing Trump’s policies resonating in their discussions with their clients. One member cited a CTO of a large organisation, who wanted advice on moving its cloud strategy away from Amazon Web Services because of the uncertainty and risks associated with relying on US organisations.
Marketing teams are already rethinking their strategies, using the disruption to shift their messaging to emphasise reliability and quality. For instance, one luxury brand for HNWI is repositioning itself to highlight stability in an unpredictable market.
Amongst all the turmoil, some sectors such as defense are seeing growth with European countries increasing military spending. Canada is also looking to strengthen trade ties with ‘reliable allies’ like the UK, which could lead to new infrastructure investments.
The rapid news cycle
One of the biggest challenges for businesses and journalists alike, is staying on top of this rapidly changing news cycle. Lanktree described how chaotic it’s been with policies shifting every few hours, stock market swings, and last-minute government announcements.
He talked through the previous day’s news: President Trump had posted on Truth Social that tariffs on steel and aluminum were going up to 50% because of the Ontario provincial government’s 25% electricity surcharge. Hours later, a meeting was set between Ontario’s Premier and the US Commerce Secretary, and Canada announced it was removing the surcharge.
“I saw editors and reporters scrambling because they were in the midst of editing the story about the first thing that happened, then they had to include the next thing that happened, which would have changed the top of the story.”
Thankfully, that’s what trusted media brands like POLITICO and the other World Media Group members do brilliantly – they are on the frontline, bringing us timely news that we can trust, helping us to separate the wheat from the chaff.