Recently, I was listening to NPR discuss Trump's tariffs, and I started to wonder how we, as searchers, should take them into account when evaluating businesses. In my latest blog post, I share some insights on the industries most affected by the tariffs and how we can assess businesses through the lens of the cost increases they've created.
Read it here - https://medium.com/p/52dc2c88ad98
What adjustments are you making to your business acquisition strategy to navigate external challenges like trade policies? Share your thoughts in the comments!
Overall - it provides interesting historical context on Trump's trade policy views dating back decades. Understanding the deep-rooted nature of these policies suggests tariffs might be a longer-term factor to consider in acquisitions, potentially creating the market volatility others have mentioned. More broadly, the move towards tariffs, protectionism, and a more multipolar world are gamechangers from a macro-perspective.
For underwriting, it is definitely worth scenario planning and considering both the direct cost impacts and second-order effects when evaluating targets.
The good news, at least, is that it now "real" and not a theoretical behavior analysis, and one would think sellers are more open to accepting valuation and structures that acknowledge it.