The Potential Impact of Trump’s Tariffs on Family Offices

Family offices engaged in direct business acquisitions or operating companies must consider the effects of tariffs on supply chains and profitability. In an environment where tariffs contribute to broader economic uncertainty, debt and equity providers may become more cautious, which could lead to tighter access to capital.  For family offices acquiring businesses in sectors sensitive to trade policies, these higher costs could influence deal valuations, cash flow projections, and long-term operational strategies. This could result in delays or even challenges to business viability.

Industries reliant on global supply chains may experience significant challenges due to tariffs on imported goods. Industries such as manufacturing, technology, and infrastructure may face increased costs for machinery, raw materials, and components—particularly from key global trading partners like China, Japan, and Germany.

The imposition of tariffs on imports, primarily on essential machinery or raw materials, could substantially elevate production costs. These price hikes may squeeze profit margins and lead to potential inefficiencies. For instance, an increase in the cost of essential equipment or parts, previously sourced from international suppliers, could significantly affect overall operational budgets and profitability. The broader effect on the supply chain—manifested in delays, increased shipping costs, and inventory shortages—can also disrupt business operations, potentially hindering growth and scaling efforts.

For example, during the height of the U.S.-China trade war in 2018–2019, the S&P 500 saw multiple periods of instability, with sharp declines following tariff announcements (Federal Reserve Bank of New York, 2019). Companies heavily reliant on international supply chains—such as those in industrial manufacturing, automotive, and consumer electronics—experienced reduced earnings due to increased input costs (U.S. Chamber of Commerce, 2020).