Court Battles, Chip Giants, and Supply Chain Chaos Define the Week

Trade wars, court battles, and corporate upheaval dominate this week's global supply chain landscape as businesses navigate unprecedented volatility. At the center of it all: Donald Trump's controversial tariff regime faces significant legal challenges that could reshape international commerce.

The Federal Court of International Trade delivered a bombshell ruling that Trump exceeded his authority by imposing certain duties under emergency powers legislation. Though quickly appealed and temporarily stayed, this legal challenge represents the first meaningful check on the administration's unilateral trade actions. Meanwhile, Trump doubled down by announcing another 25% tariff on steel during a Pittsburgh speech, bringing the total to 50% while claiming China violated previous trade agreements. The podcast examines how this "TACO" approach (Trump Always Chickening Out) - threatening extreme measures then partially pulling back - creates destructive uncertainty throughout global supply chains.

Against this chaotic backdrop, we explore contrasting corporate fortunes: Nvidia's spectacular 69% revenue growth to $44.1 billion in the AI chip sector, Chinese EV maker BYD outselling Tesla in Europe for the first time, Stellantis appointing new leadership, and Volvo announcing 300 layoffs. For businesses caught in this crossfire, strategic options include supplier diversification, reshoring considerations, enhanced digital visibility, and building adaptable systems capable of navigating rapid policy shifts. The fundamental question remains: how can companies make sound long-term investments when the policies driving these expensive changes could disappear overnight?

What strategies are working for you in this volatile environment? Subscribe to Chain Reaction for weekly insights on navigating global supply chain challenges and upcoming episodes on bureaucracy's hidden costs, heuristics in decision-making, and digital twin technology revolutionizing supply chain management.

You can follow Chain Reaction on LinkedIn, Twitter and Facebook

Chapters

• 0:00 Weekly Roundup Introduction
• 1:16 Trump's Tariff Legal Battle
• 2:49 Corporate News Roundup
• 5:59 Trump's Tariff Controversy Continued
• 9:31 Tariff Impact on UK Trade
• 17:41 Supply Chain Strategy Recommendations
• 21:08 Previous and Upcoming Episodes

Transcript

Tony: 0:02

you're listening to chain reaction all about supply chain advantage. Hello, tony hines here, glad you could join us today. We've got an episode coming up. It's the weekly roundup. It's the pulse all things impacting global supply chains. This week we get to the heart of business and there's been quite a lot happening. So stick around, stay tuned, stay informed. And there's been quite a lot happening. So stick around, stay tuned, stay informed. Subscribe to Change Reaction. If you're not already subscribed, you'll be first to know when new episodes are out. Change Reaction.

Tony: 0:37

Donald Trump and his tariffs and the action taken by the Industrial Trade Court in Manhattan and what happened next, along with news of companies Stellantis, nvidia, tesla and lots more All in today's program. Hello, tony Hines here, good to have you along. Well, let's get to it. Donald Trump, back in the news this week as the federal law tries to rein in his tariffs. The Federal Court of International Trade in the United States this week said he didn't have the power to issue the duties under the economic emergency laws that he claims supported his action, but it only applies to certain tariffs. It doesn't apply to all the tariffs, which are applied under different laws, such as those on steel and cars and aluminum, aluminium. The white house, of course, criticized the court, said it's not for unelected judges to decide how to respond to an emergency, because they're claiming that this is an emergency, which, of course, is dubious, debatable. I don't think they viewed tariffs as an emergency, which, of course, is dubious, debatable. I don't think they viewed tariffs as an emergency when they set up this law. So I think the lawyers here could have a field day cutting through all the meaning and wording of these laws, this particular legislation. They've appealed already the finding and of course, it's temporarily on ice, as we know, and there's a postponement anyway to the 9th of July before any tariffs, such as the 50% tariffs he's imposed on the European Union, are put in place. In the meantime, the United States can carry on collecting the tariffs.

Tony: 2:44

Now, in the world of microchips, of course, that's an important business too. Nvidia this week had a good set of figures for the quarter. They produce high-end microchips for artificial intelligence and they've seen revenues climb by 69% year-on-year to $44.1 billion US dollars and they make a net profit of $18.8 billion. So it's a very profitable business. Profits have gone up by 26%. Byd, the Chinese car maker they make electric cars, of course started as a battery company and now make the cars. They sold more fully electric vehicles in Europe than Tesla, and that's the first time they've done that. Registrations of BYD cars climbed by 169% in April, year on year, as consumers have walked away from Tesla because of Elon Musk's involvement in Doge, there's been a 26.4% increase in overall sales in the EU for pure EV cars in the first four months of this year.

Tony: 3:56

Stellantis, which owns Chrysler, fiat, peugeot amongst its brands, announced that Antonio Filosa is taking over as chief executive, replacing Carlo Tavares, who resigned abruptly in December. You may remember it was reported here. Mr Filosa is an Italian and he's currently the head of the North American division, so where will he drive Stellantis 2 next? Volvo this week said there were 300 layoffs affecting roughly 15% of its workforce. They're keen to reduce costs. The job cuts will affect mostly employees in Sweden, which is the home country of Volvo it wants to cut 1.9 billion US dollars off its costs.

Tony: 4:46

It had a big fall in income in the first quarter. Nippon Steel's bid to buy US Steel was again put back after Donald Trump gave his support for that partnership. The president gave few details. He just said that the United States would retain control over US steel. And another interesting snippet this week Germany has overtaken Japan to become the world's biggest holder of foreign assets, a position that Japan held since 1991. The shift is partly a result of the exchange rate, with the euro being stronger against Japan's currency, and that's actually put the value of the German assets up. So it doesn't look like there's any significant underlying trend or development. It's simply a currency exchange gain that's caused this shift. Japanese inflation this week was reported at 3.6% in April. Well, it's interesting, isn't it?

Tony: 5:59

This week, trump, taco, taco, trump, and Taco, of course, stands for Trump always chickening out. Interesting statement, isn't it? And that's to do with his tariffs. Basically, the criticism is that he places all these tariffs at very high rates and then he pulls back from them just before they're about to be implemented. There are pause periods, and that creates even more uncertainty and it's very problematic for everybody to deal with, and this week, of course, the courts reined him in. They basically said that you can't apply these tariffs, you don't have the authority. You've used an Emergency Powers Act that's not relevant to what you're trying to do placing tariffs and they want to give power to raise tariffs back to Congress and away from the president, who's grabbed the power to act unilaterally to implement all these tariffs. Of course, that was itself overturned in a very short period, while further investigation carries on, so he's allowed to still have the tariffs in place. But it's a wake-up call, I think, and it bodes well for democracy, despite the criticisms of MAGA. That means the Trump administration, by the way, the Make America Great Again administration, and they're criticizing the courts, saying they're unelected. But you have to ask the question. The system of political checks and balances in the United States has been rather trashed by the current president's approach to setting these tariffs.

Tony: 7:53

Donald Trump's tariffs are currently in legal limbo, at least that's what many people are saying. A federal appeal court has ruled that the sweeping international tariff regime can remain in place for now, despite a lower court ruling that's found them illegal. The lower court had determined that Trump overstepped his authority by imposing duties under the International Emergency Economic Power Act, which traditionally requires congressional input. The tariffs in question include a 10% blanket import tax on goods from various countries, along with higher tariffs on trade partners like the EU and China. However, trump's tariffs on cars, steel and aluminum, which were imposed under a different law, remain unaffected by this ruling. The next court hearing is scheduled for June 5th, and Trump has indicated he may take the case to the Supreme Court if necessary.

Tony: 8:55

Meanwhile, trade negotiations continue and businesses remain uncertain about what the future of these tariffs will be. And, of course, all of this wrangling is no good for businesses trying to manage their global supply chains and trying to plan ahead for the future. Investment decisions will be delayed, decisions about markets and where to set up production hubs will all be delayed, so supply chains and global supply chains are in disarray. It's been that way since Trump first introduced his tariff regime back in the spring and when we had Liberation Day, april 2nd, when he shackled everybody in chains, causing chaos around the globe and everybody going cap in hand to the White House to beg for a deal. And that's what it looked like, didn't it? Begging for a deal, going to see the Don a deal, and that's what it looked like, didn't it? Begging for a deal? Going to see the Don, going to see the Godfather? Well, it was just like that Martin Scorsese film. That's what it reminded me of I don't know about you.

Tony: 10:06

The US Court of International Trade invalidated four executive orders on May the 28th. They were imposed under the International Emergency Economic Powers Act, ieepa the 25% IEPA tariffs on Canada and Mexico, the 20% IEPA tariff on China and country-specific IEPA reciprocal tariffs ranging from 10% to 67% and formerly the 125% on China. They argued in the court that it exceeded any authority granted to the president to regulate importation by means of tariffs. The court ordered Customs and Border Protection, cbp, to stop collecting duties from these tariffs within 10 days. Section 301 and 232 duties remain in place and they're not affected by these rulings. On May the 28th, the Trump administration immediately appealed the decision, asking the US Court of Appeals for the Federal Circuit to stay the order, and of course, we know now that they have, so it's temporarily lifted.

Tony: 11:17

The United States trade deficits in goods narrowed quite sharply in April and that's because of the rush to beat Trump's tariffs. Many companies made efforts to bring goods in early and the trade gap contracted by 46% to $87.6 billion last month. Remember, of course, this is only temporary because they brought things in earlier than they would normally do, so it's likely that in later months it could be higher. Imports decreased by $68.4 billion to $276.1 billion and the exports increased $6.3 billion to $188.5 billion. Now, of course, if those exports remain fairly flat and the imports reduce because they're not racing to beat the tariffs, then the trade gap would, of course, move back.

Tony: 12:19

Well, donald Trump's not quiet for very long, is he? He's one of those people that makes lots of noise all the time and of course now he's slapped another 25% on steel. He made an announcement at a convention, speaking to steel workers in Pittsburgh on Friday evening, and so we have 25% tariffs on again. And of course, there have been accusations in the last few days of China not respecting the agreement that was made earlier. When Trump relaxed the tariffs, he postponed them for 30 days while they were negotiating. But there's now a bit of a SPAC going on on both sides accusing each other of not honouring that agreement. And of course, certainly with Trump's steel tariffs piling on yesterday, that seems to be well and truly gone. So the import duties on steel now sit at 50%, not 25%. The steel workers in Pittsburgh of course welcomed the news because they think it's going to protect their jobs. But the question is, will it really? Trump said it was all to prevent shoddy steel coming in from Shanghai.

Tony: 13:38

Us investors were thrown into some turmoil this week as President Trump accused China of violating a tariff agreement. He didn't exactly say what the violation had been, but he wrote in a Truth Social message China, perhaps not surprisingly to some, has totally violated its agreement with us. So much for being Mr Nice Guy. Well, there you are, he thinks of for being Mr Nice Guy. Well, there you are. He thinks of himself as Mr Nice Guy. The US president didn't say how they'd violated this agreement, but you might remember, both sides had agreed that the United States would drop levies on Chinese imports from 145% to 30% during a 90-day negotiation period and China would cut duties from 125% to 10%. The standard and pause dropped by 0.3%.

Tony: 14:34

At this news, Manitoba has declared a state of emergency. As we're going to press with this one today, 17,000 people need to act quickly to move out of the way of wildfires, including from the city of Flintflon. Many will have to occupy soccer fields and community centres in Winnipeg and other cities as federal armed forces were arriving to help transport the evacuees. This is the largest evacuation in many Manitobans living memory. It's temporarily shut down some oil and gas production facilities and small town residents have had to move out.

Tony: 15:31

Now, in this next piece, I want to talk to you about how the tariffs impact particular countries, and I'm going to take a look at the United Kingdom. And I'm going to take a look at the United Kingdom, and if we look at what's been going on with the tariffs that Trump introduced this year, we can see there have been lots of changes. The United Kingdom maintains a strong trade relationship with key global economies. Imports and exports shape the nation's economic landscape. In my discussion, I'm talking about that relationship with the United States. For example, uk imports £92.7 billion worth of goods and it exports £60.4 billion. The percentage of total UK trade with the United States is around 15.3%. If we look at Germany, the UK imports 76.8 billion from Germany and it exports 50.2 billion to Germany. That's about 12.5% of the total UK trade. And with China, the UK imports 99.2 billion and exports 45.3 billion.

Tony: 16:46

Again, that's around 14.8% of total UK trade. And with France, 39.1 billion imported, 30.8 billion exported that's about 7.9%. And with India, uk imports about 15.3 billion and it exports 64.9 billion that's about 8.2%. So you can see all the partners that the United Kingdom has been trading with quite recently and how it impacts the type of relationship that they have. So the UK-India free trade agreement was quite important important to India as well.

Tony: 17:31

What the tariffs have meant for most supply chains outside and inside the United States is new uncertainties and lots of volatility, and volatility is perhaps the biggest challenge facing all supply chains currently. The geopolitical tariff hikes and uncertain trade policies from the US are causing suppliers to think about new strategies like diversification, nearshoring, and they're talking about taking a look at the suppliers that they do deal with in different countries to assess the risks that are involved, and whether they initiate nearshore or frenshore production hubs is a matter of choice for them. Will it reduce dependency on volatile international suppliers, lower tariff exposure, or will it simply mean it will make things more difficult for them in the medium to longer term when perhaps the tariffs are reduced or completely eliminated? How long will these tariffs be around? That's a question everybody's asking Are these a permanent fixture? Well, nothing's permanent, but it is a question of how long Limited.

Tony: 18:51

Supply chain visibility is another issue, and digital transformations are very important to ensure that we can maintain visibility and get those real-time data so that we can understand exactly what's going on in the supply chain.

Tony: 19:07

You have to be prepared for risk. You have to find ways to stress test those supply chains that you have to see how they're going to be impacted, along with the kinds of data that you collect for your business. Proactive risk management is the name of the game and build resilience, but be adaptable. Fast adaptability is the way to stay ahead. Remove any inefficiencies anyway in the supply chain which you should be doing in any case and make sure that you can be agile with inventory, that you can have flexible logistics arrangements and that you're able to move things around quickly so you can streamline operations with minimizing any bottlenecks might occur across your supply chain. Forecasts are key, but most forecasts these days happen in real time too. We get data fast. We're able to predict what might happen reasonably fast To stay ahead. We have to do that to make sure that we can essentially keep the supply chain moving efficiently and effectively for our customers.

Geoff: 20:26

Given how much it costs and the sheer effort involved in making these huge strategic moves, like reshoring or building new hubs in friendly countries, how can businesses possibly know if it's worth the gamble, especially when the very policies driving these expensive changes, like specific tariffs, could just disappear tomorrow?

Tony: 20:45

Well, that's very true, of course. That's exactly the problem, and, given the investments involved, are people going to take those risks? Well, let's see what the president does next with his international or global trade policies. They're not really policies, are they? It's just tariff, tariff everything and hope it works. Subscribe to Chain Reaction and you'll be first to know when episodes are out.

Tony: 21:17

Now there are some great episodes in the past few weeks and I'm sure you'll want to catch up on them. In the past week, we had supply chain strategies that work when global politics don't. Global trade is facing unprecedented disruption from tariff wars and geopolitical conflicts, forcing businesses to radically rethink their supply chain strategies for survival and competitive advantage, and it's just the sort of thing we've just been talking about in the Pulse right now, so you can listen to a full episode on what's happening. You can also take a look at the previous Pulse, the one before this, one, which talked about inflation figures in the UK, a concerning milestone, the Consumer Price Index hitting 3.5% back in April, and of course, you can see how those things are impacting global supply chains. Then there's an episode on Beyond Efficiency, and it's a future episode you won't want to miss. Ready to transform your supply chain decision-making. Well, stop by and have a listen. Then we had a program on global trade shifts the Global Trade Chessboard. That's being dramatically reshaped every day and it's in the pulse every week because it's such a big issue for global supply chains. And it's in the Pulse every week because it's such a big issue for global supply chains and it's changing rapidly. So if you want to keep ahead, stay up to date and find out what's happening, you need to listen to that. Then we had the hidden costs of policies on energy tariffs and global supply chains, and an episode that's been particularly popular was called Make America Poor Again the real cost of tariff madness. I'm sure you'll want to go back and perhaps listen to that, if you haven't heard it already.

Tony: 22:57

Next week's episode is all about red tape, bureaucracy, the hidden costs in supply chains. I'm sure you won't want to miss that. And that's out on Wednesday. And then the week after, we have a program on heuristics in action, when experience meets decision making, and the week after that, what happens when the walls go up in a connected world. That would be interesting, won't it? And the week after that, digital twins revolutionizing supply chain management. So I'm sure there's many episodes you won't want to miss. Drop by, in fact, make sure you drop by by being subscribed. Well, that's it for this week. I'm tony hines, I'm signing off, take care, and I'll be back in the next episode.

Geoff: 23:43

Bye for now you've been listening to the chain reaction podcast written, presented and produced by Tony Hines.