How Tariffs, Supply Chains, and Labor Shortages Are Shaping Business in 2025
The global economy is shifting—and so is the way businesses must respond. In this episode of the Measure Success Podcast, Carl J. Cox, CEO of 40 Strategy and 40 Accounting, sits down with economist Dr. Bill Conerly to talk about the ripple effects of the newest round of U.S. tariffs and what they really mean for companies on the ground.
What Happened with Tariffs?
The U.S. government has implemented a new round of global tariffs, ranging from 10% to over 40%. These tariffs apply to imported goods, not services. While some of the cost may be absorbed by foreign suppliers, most of it will be passed on to U.S. consumers and businesses.
Dr. Conerl, author of The Flexible Stance: Thriving in a Boom/Bust Economy, explains that these changes could raise prices by about 2–3%—not extreme, but enough to create serious complications for companies already dealing with inflation and supply chain strain.
How Will It Affect Business?
Most companies will feel the effects through:
- Increased input costs
- Supply chain delays
- Unpredictable pricing
- Decreased consumer demand
One example from the episode: a U.S. manufacturer lost a major six-figure bonus overnight after tariffs hit and their big-box retail buyer refused to pay the increased prices.
Supply Chain Visibility Is Crucial
Many companies don’t know the full origin of their parts and materials. That’s a problem now.
Dr. Conerly urges leaders to ask:
- Where are our goods actually made?
- What’s the foreign content in our supply?
- Can we shift to different vendors—or local production?
He also advises reviewing supplier contracts to prepare for future tariff-driven price changes or shipping disruptions.
What About Labor?
The U.S. is facing the slowest growth in working-age population since the Civil War. Immigration is down, retirements are up, and there’s no quick fix.
Dr. Conerly’s advice:
- Improve labor productivity with better tools and training.
- Focus on retention—it costs less than recruiting.
- Build a recruiting pipeline before you need it.
AI Is a Business Advantage
Companies that adopt AI-powered tools to reduce repetitive work and increase productivity will win in the labor-shortage economy. Conerly says AI shouldn’t be flashy—it should just work. If your team isn’t using AI to improve core tasks, your competitors probably are.
Should You Be Worried About a Recession?
While Dr. Conerly isn’t predicting a recession, he does say the risk has increased. Uncertainty slows capital investment. If enough companies wait too long to act, that caution can tip the economy.
His advice: Don’t freeze. Move forward with thoughtful, data-informed decisions.
Final Takeaway
Leadership in 2025 means facing change head-on. Instead of fearing what’s next, take stock of your supply chain, pricing model, labor plan, and customer relationships. Then take strategic action.
Listen to the full episode for detailed insights, real-world examples, and practical ideas to guide your business through uncertain times.
🎧 Click here to listen now
Let 40 Strategy help you navigate these new challenges. Let’s talk!
Listener Feedback:
