3 Ways Tariffs Between Two Countries Impact Third-Party Nations' Businesses
International trade dynamics are constantly evolving, with tariffs between two countries creating ripple effects across the global economy. This article explores the unexpected consequences of trade disputes on businesses in third-party nations, from supply chain shifts to construction cost fluctuations. Drawing on insights from industry experts, readers will gain a deeper understanding of how seemingly distant trade policies can significantly impact their own business operations.
- Tariffs Shift Global Supply Chains
- Operational Rerouting Impacts Third-Party Nations
- Trade Wars Affect Local Construction Costs
Tariffs Shift Global Supply Chains
When the US raised tariffs on Chinese goods a few years back, I saw ripple effects hit places that had nothing to do with either country. One of SourcingXpro's European clients suddenly started sourcing from Vietnam to dodge tariff hikes. But within months, factory prices there jumped nearly 18% because so many Western buyers flooded in. It created supply bottlenecks and longer lead times everywhere, even for smaller markets. Tariffs don't just raise costs—they shift traffic, demand, and pressure across entire regions. It taught me that global trade works like water—it always finds a way around, just never without turbulence.
Operational Rerouting Impacts Third-Party Nations
A lot of aspiring economists think that tariffs are a matter of a single channel, like trade. But that's a huge mistake. A leader's job isn't to be a master of a single function. Their job is to be a master of the entire global operational system.
Tariffs primarily affect third-party nations by forcing an operational rerouting of the supply chain. It taught me to learn the language of operations. We stop thinking about the trade war and start treating it as a sudden, massive increase in logistics cost.
The specific ripple effect we observed was on a South American heavy-duty parts supplier. Chinese manufacturers rerouted products through that country to bypass US tariffs. This collapsed the South American supplier's profit margin because their established operational cost structure couldn't compete with the subsidized rerouted supply.
The impact this had on my career was profound. It changed my approach from being a good marketing person to a person who could lead an entire business. I learned that the best trade agreement in the world is a failure if the operations team can't deliver on the promise. The best way to be a leader is to understand every part of the business.
My advice is to stop thinking of tariffs as a separate economic problem. You have to see them as a part of a larger, more complex system. The best leaders are the ones who can speak the language of operations and who can understand the entire business. That's a leader who is positioned for success.
Trade Wars Affect Local Construction Costs
Tracking global tariffs isn't my expertise. My experience with trade wars is felt only in the sudden, unexplained price increases for my materials. The specific "ripple effect" I've observed is how tariffs between two large nations on steel and aluminum instantly cause the price of domestic metal roofing to spike.
The issue is that our local market had to compete with a new, higher global price for that raw metal. When a tariff increased on steel imports into the US from one country, manufacturers in other countries raised their prices to match the new market rate. This occurred even though our shingles and metal are locally sourced.
This "ripple effect" significantly impacted my clients. I had to raise my quotes for premium metal roofs considerably, and I saw a direct decrease in homeowners choosing that durable option. The instability caused by these distant trade wars made my most valuable, long-lasting product less accessible to the average local homeowner.
The ultimate lesson is that in a trade business, all financial costs are globally connected. My advice is to stop worrying about local competition. Keep a close eye on the raw commodity cost of your materials—lumber, asphalt, and metal—because that global instability is the single biggest risk to your local profitability.
