The recent surge in U.S. tariffs and retaliatory measures from trading partners is reshaping the global economic landscape, leaving businesses and secured lenders grappling with uncertainty. From rising costs to shifting valuations, this article dives deep into the challenges posed by these sweeping changes

Whether it’s massive and sweeping increases in U.S. tariffs, retaliatory tariffs from trading partners, or an about-face on those numbers, secured lenders and their clients are bracing to see just how it will all shake out. The obvious and most direct concern is the rising costs for American companies reliant on the global supply process, as well as the economic fallout. A day after the announcement of a new and significant round of U.S. tariffs on April 2, the stock market responded with a huge sell-off. Those new tariffs were put on a 90-day pause shortly thereafter. However, steep tariffs remain on China, along with a massive retaliatory tariff from the country.

With other new tariffs already in place and greater risk of inflation, asset-based lenders and factors are noting that appraisers become more essential than ever to provide accurate and speedy valuations. A baseline tariff of 10% stands on most countries. According to Alex Sutton, managing director, head of research for Gordon Brothers, asset-based lenders and factors are justifiably worried about rising import and procurement costs for their clients and what it will ultimately mean for valuations. He says company leaders are also finding it difficult to develop business plans in the long-term given the swift changes in tariffs. Historically, the time from announcing a new tariff to its implementation has not been as short as it has been in the first few months of 2025. “There really hasn’t been a lot of time for people to react and do things, like proactively purchasing inventory,” he adds. In turn, secured lenders are keeping the steady lines of communication open with their clients and staying apprised of any new changes to U.S. tariffs and retaliatory ones, as well.

Assessing the Changes
U.S. companies using metals to manufacture everything from cars to soda cans are sure to feel the pinch from sizeable tariffs currently instituted on steel and aluminum imports. Some imported car parts will be subject to a 25% tariff in May. U.S. lumber is facing retaliatory tariffs from China, one of the country’s largest markets. Valuations, in turn, are expected to take a hit. With the complexity of supply chains today, companies sourcing base materials from abroad and then only to send them back abroad for finishing and final sale in the U.S. might also be burdened by more than one tariff, says Sutton. The United States-Mexico-Canada Trade Agreement (USMCA), that went into effect on July 1, 2020, exempts some items from tariffs between the three countries. However, President Trump imposed a 25% tariff on Canada and Mexico in March for most goods that do not satisfy the USMCA rules of origin.

At the moment, much of the implementation of tariffs remains unclear. The option to buy from a country with lower tariffs might not be as easy as it might seem. Supply chains are often too complex to unravel quickly, says Sutton. U.S. car manufacturers, for instance, have strict procedures on sourcing parts. It isn’t a simple process to shift to another original equipment manufacturer in another country. OEMs operate on small margins, and contracts are out to bid and awarded for multiple years. 

Passing on the Costs
Companies will have a big decision to make, says Stephen D’Aquila, senior vice president at Hilco Valuation Services. “Do I just raise my prices, and will the consumer withstand that type of price increase? It really depends on what the product is and what your customer base looks like.” If companies are selling to high-income households where price is less of a priority, then companies might have more flexibility with adjusting prices. “If you’re selling product to low-income consumers, then price is a major factor in the decision making,” he says. It’s a delicate proposition, especially for companies focused on producing or selling items with low profit margins to begin with, such as groceries or other consumables

Shoppers remain focused on the potential price hikes on retail items, and they are responding by keeping their wallets closed, worried about what may be in store, figuratively and literally. Consumers are already facing steadily rising grocery prices. The Labor Department reported those costs were up 28% from five years prior. It’s not surprising that consumer confidence dropped to its “lowest level in 12 years and well below the threshold” that indicated a possible recession ahead, according to March data from the Conference Board. Any additional impact on sales is certain to dampen valuations.

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