Trump temporarily halts reciprocal tariffs policy; companies like DHL and Walmart adopt strategic suspensions in response.

On April 9, President Donald Trump announced a temporary delay of the reciprocal tariff policy originally set to take effect in July, allowing a 90-day negotiation period for various countries. This move temporarily eases trade tensions, but companies like DHL, Walmart, and Caterpillar face uncertainty and are taking strategic pauses, adjusting their business models to reduce the impact. DHL is pausing high-value B2C shipments, Walmart and Target are pausing sales of Chinese-made private labels, and Caterpillar is postponing capital expenditures. Companies are seeking stability and opportunities amidst the uncertainty of the policy.

Trump's Tariff Policy Reversals Leave Businesses in Uncertainty

Since Trump announced the implementation of a "reciprocal tariff policy" on global trade partners on April 2, the market and business community have been on high alert. The policy initially planned to impose a 10% tariff on all imported goods, with tariffs on China reaching as high as 145%. However, just a week later, on April 9, Trump announced a suspension of its implementation, granting a 90-day negotiation period and temporarily shelving the tariff measures originally set to take effect on July 8.

Despite Trump's claim that 90 to 100 countries have expressed willingness to negotiate, he also warned that if no agreement is reached, tariffs might be reinstated within the next two to three weeks. This policy reversal and ambiguous negotiation progress make it difficult for businesses to formulate long-term strategies.

DHL: Halts High-Value B2C Shipments to Cope with Customs Pressure

Logistics companies are the first to bear the brunt. On April 21, DHL Express announced a suspension of B2C shipments to the U.S. with a customs value exceeding $800. This move is in response to U.S. Customs lowering the simplified customs clearance threshold from $2,500 to $800 starting April 5, resulting in a significant increase in shipments requiring formal customs clearance and a surge in administrative burden.

DHL stated that this suspension is to avoid customs delays and deterioration of customer experience, and they will use this time to reassess processes and resource allocation. The company also signed a memorandum of cooperation with cross-border e-commerce platform Temu to assist in promoting a "local-to-local" logistics model in Europe, reducing reliance on the U.S. market.

Walmart and Target: Suspend Chinese-Made Private Labels, Warn of Supply Chain Risks

Retail giants Walmart and Target have chosen to suspend the production and procurement of some Chinese-made private label products. According to Axios, the CEOs of both companies expressed concerns about the tariff policy during a meeting with Trump on April 21, pointing out that continued policy fluctuations could lead to supply chain disruptions and empty shelves.

A Target spokesperson stated, "We had constructive talks with the President and retail peers, reiterating our commitment to providing value to American consumers." These companies have also initiated supply chain diversification plans, seeking alternative production bases in Southeast Asia and Mexico.

Caterpillar: Strategic Consolidation, Pauses Capital Expenditure and Expansion

As the world's largest manufacturer of wheel loaders, Caterpillar owns 109 factories, 51 of which are in the U.S. Despite potentially benefiting from the tariff policy on the surface, the company has opted for a "strategic pause," halting new factory construction and acquisition plans, and enhancing asset utilization efficiency.

According to Business Weekly, Caterpillar does not view the policy benefits as an expansion opportunity but instead conducts cost reassessment and supply chain risk simulations to ensure operational stability amid policy changes. This "strategic consolidation" action reflects the company's high alertness to policy uncertainty.

"Pause" Becomes the New Buzzword for Businesses

Following Trump's announcement to suspend reciprocal tariffs, the term "pause" quickly became a buzzword among corporate executives. According to the "P-A-U-S-E" strategy framework compiled by Harvard Business Review and Business Insider, businesses facing uncertainty can conduct a strategic pause through five steps:

1. Prepare with Purpose: Clearly define the purpose and scope of the pause and communicate with stakeholders.
2. Assess Critical Uncertainties: Identify uncertainties and develop scenario scripts.
3. Use the Time for Intelligence Gathering: Organize project teams to gather market and supply chain intelligence.
4. Simplify & Stabilize Operations: Streamline resource allocation, stabilize cash flow, and core business.
5. Execute When the Fog Clears: Set conditions for resumption and prepare for swift action.

This framework has been adopted by many companies as a guide to navigate policy uncertainties.

Treasury Provides Tax Relief to Help Businesses Weather the Storm

Facing declining revenues and cash flow pressures, the U.S. Treasury announced that businesses and individuals affected by the tariff policy can apply for interest-free deferral or installment payment of income taxes, with a maximum extension of up to three years. The Treasury noted that the application conditions are more lenient than during the COVID-19 period, requiring only proof of revenue decline.

This measure provides short-term financial relief for businesses, allowing them to focus on adjusting operational strategies rather than being burdened by tax pressures.

Businesses Seek Stability Amid Uncertainty

Although the Trump administration emphasizes completing negotiations with major trade partners within 90 days, Treasury Secretary Mnuchin admitted that this timeframe is "unlikely" to be met. Businesses generally believe that instead of passively waiting for policy clarity, they should proactively hit the "pause button" and find direction amid the fog.

From DHL's logistics adjustments, Walmart's supply chain restructuring, to Caterpillar's capital consolidation, these actions demonstrate that companies are pragmatically responding to policy uncertainty and preparing for future resumption through strategic pauses.

References

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