American Companies Are Stocking Up to Get Ahead of Trump’s China Tariffs

By 9 p.m. on election night, it had become clear to Jason Junod that Donald Trump was returning to the White House. That night, he contacted his skin-care company’s suppliers in China to order a year’s worth of inventory for about $50,000—as much as he could afford to buy and had room to store.

His hope is that the roughly 30,000 body brushes and exfoliating gloves make it to Bare Botanics’ facility in Madison, Wis., before Inauguration Day. He thinks Trump is serious about his campaign promise to impose tariffs of 60% on all Chinese goods.

American businesses are dusting off a playbook they used during Trump’s first term: stocking up on imported goods before tariffs are enacted. They are also considering how to cope with the levies if and when enacted—whether they will be able to raise prices and whether they will need to find alternatives to their Chinese manufacturers.

“The biggest consideration is, do we stay in China?” Junod said.

When Trump began his trade war against China in 2018, U.S. businesses scrambled to front-load imports before tariffs were implemented, according to an International Monetary Fund analysis. As a result, the U.S.’s trade deficit with China—how much imports exceed exports—rose in 2018 before falling in 2019.

Bare Botanics’ body brushes are manufactured in China. Photo: Jamie Kelter Davis for WSJ

Already, exports from China surged last month, which some economists think could have been driven at least in part by front-loading amid uncertainty around election results. Outbound shipments from China rose nearly 13% in October from a year earlier, well above consensus expectations and up sharply from 2.4% growth in September.

Chinese exports growth should remain strong through the next few months because of front-loading, Wall Street economists said.

China remains the world’s top exporter of goods and the U.S. its top buyer. American companies bought roughly $430 billion of Chinese goods last year, with computer and electronic products making up the biggest chunk.

Wan Junhui, who works in marketing for an electronics manufacturer in Guangdong province, said his company has observed an increase in inquiries and “noticeable unease” from its U.S. clients recently. He said that tariffs so far haven’t affected sales significantly, but that buyers end up absorbing the levies and sometimes raising prices for their end customers.

“We’ll do our best to focus on reducing costs to help ease the situation and make it through this harsh winter,” he said.

Though China’s share of U.S. imports has declined to roughly 14% in 2023, from 22% in 2017, rising tariffs between the U.S. and China have done little to curb the overall U.S. trade deficit in global trade or China’s overall trade surplus.

The persistent trade imbalance is driven by strong demand from American consumers and weakening domestic demand in China, according to the IMF. U.S. firms have boosted their share of imports from places such as Vietnam, while China has increased exports to regions including Southeast Asia.

Tariffs aren’t paid by exporters, but rather by businesses that import products. Economists say those businesses usually pass on the bulk of the cost to consumers by raising prices.

Some economists doubt the U.S. will succeed in raising tariffs to 60% across the board on Chinese products. Economists at Goldman Sachs predict additional duties on China could average out to a 20 percentage-point increase in the effective tariff rate.

In addition to duties on Chinese goods, Trump proposed tariffs of 10% to 20% on imports from all countries.

That would be the worst-case scenario for Leah Dark-Fleury, co-founder of Stone Fleury, a natural-stone and porcelain wholesaler in San Francisco. She has been buying natural stone from the same supplier in China for two decades and imports most of her other materials from Europe.

When Trump imposed a tariff on Chinese natural stone during his first term, Dark-Fleury continued buying from China as usual. The company raised prices to compensate, but tried to not charge the full increase to stay competitive.

This week, she asked her supplier in China about the possibility of ordering about two shipping containers’ worth of natural stone under a payment plan to try to get ahead of tariffs. That could cost up to around $100,000 and last her between a few months and a year, depending on customer demand. In the longer run, she expects to raise prices on materials from China and shift some sourcing to Vietnam.

“I wish that I could buy enough to get us through the four years,” she said.

Toni Norton , owner of Fine Fit Sisters in Charlotte, N.C., sources body oil from China that is popular with customers in the summertime. She normally wouldn’t be stocking up until the new year, but is trying to order about 20,000 units before the end of the year.

If tariffs on Chinese products indeed reach 60%, Norton said she might have to stop selling body oil and focus more on her fitness-coaching services. She said she doesn’t think she has much room to raise prices on the body oil, which she mostly advertises on TikTok and sells for about $13, because “people like cheap things.”

Front-loading imports “is a short-term solution,” said Chris Tang , a professor of supply-chain management at the University of California, Los Angeles. Businesses are likely to need additional strategies in a world with persistently higher and broader tariffs.

Companies have already been moving manufacturing from China to places such as Southeast Asia and Latin America, a trend that is expected to continue—if buyers are able to find a suitable alternative to Chinese production.

A 2024 survey by Bain & Company found that 69% of chief executives and chief operating officers plan to reduce their company’s dependence on China, up from 55% in 2022.

Ryan Bursky , CEO of Lucidity Lights, a maker of lighting products in Boston, said the expectation of new tariffs is only accelerating a process under way at his company. Lucidity Lights made a strategic decision last year to begin sourcing outside of China, where it had previously done all of its production, in part because of the first phase of the trade war.

The company is on track to do about 15% of production in Cambodia this year, with plans to move about half of production out of China next year. He believes it is a better use of resources to invest in supply-chain diversification, rather than stockpiling.

Bursky said it has taken some time to find the right suppliers in Cambodia, which is still growing its manufacturing capacity and speed. But he thinks that the products made in Cambodia are better quality and that there is more attention to detail.

Joe Jurken , the founder and managing director of the ABC Group in Milwaukee, which helps U.S. businesses manage supply chains in Asia, expects China to still dominate manufacturing somewhat, even as his clients have beefed up sourcing from countries such as Vietnam, India and Cambodia.

China has developed infrastructure, communication and transaction channels that make doing business easy for Western companies, while those systems are still being developed in other countries, he said. Plus, it is hard for manufacturers in other countries to beat Chinese suppliers’ low prices.

“China will never be replaced,” Jurken said. “Other markets are an alternative.”

Junod, who started his skin-care business in 2020, has considered looking for manufacturers in Southeast Asia, but believes it would be difficult to replicate the low cost and high quality he has come to rely on from his Chinese suppliers.

“It feels like we’re being punished because there isn’t really anywhere else for us to turn domestically,” he said of Trump’s proposed tariffs. “We have no choice, really, but to pay them.”

Reporting season has once again reminded investors that a strong profit does not guarantee a rising share price, and a large loss does not always trigger a sell-off. What matters most is how each result compares with expectations and, increasingly, what management says about the year ahead. During the August 2026 season, companies offering credible turnarounds or unexpectedly strong guidance were rewarded handsomely, while those flagging weaker margins, slowing demand or greater uncertainty were punished.

The following ranking draws on Morningstar’s review of 164 ASX-listed companies and measures each company’s share-price movement on the day it reported. This captures the market’s immediate response to the earnings announcement, before subsequent economic developments, dividends and company-specific news cloud the picture. Here are the five biggest winners, and the five hardest-hit losers, of the season so far.

The five winners

1. Bapcor (ASX:BAP): +41.0%

Bapcor delivered reporting season’s largest relief rally after presenting early evidence that its troubled automotive-parts business was stabilising. Although underlying revenue fell 1.8% to $1.92 billion and underlying NPAT collapsed 85% to $10.8 million, underlying EBITDA of $152.5 million exceeded guidance.

More importantly, working-capital initiatives released $68.5 million in the second half, lifting cash conversion to 109.4% and reducing net debt by 63% to $135 million. The statutory loss was $431.6 million, largely because of non-cash impairments. Investors focused on improving operational momentum, stronger liquidity and management’s expectation of modest FY27 revenue growth.

2. Zip Co (ASX:ZIP): +18.2%

Zip comfortably surpassed its FY26 targets, sending the buy-now-pay-later provider’s shares sharply higher. Transaction volume rose 23% to $16.7 billion, while cash earnings before tax, depreciation and amortisation jumped 58% to a record $268.9 million. Statutory profit climbed 46% to $116.4 million, and the cash operating margin expanded by 4.2 percentage points to 20%.

The strongest signal was guidance for FY27 cash earnings of $340 million—around 26% growth and above analysts’ forecasts. US transaction volume increased 42.5% and now represents three-quarters of group volume, offsetting weaker customer activity in Australia.

3. CSL (ASX:CSL): +17.3%

CSL’s result was hardly spectacular in isolation, but it cleared a market bar that had fallen dramatically following earlier downgrades and restructuring announcements. Underlying NPATA was US$3.1 billion, down 2% in constant-currency terms, while operating cash flow reached US$3.51 billion.

CSL maintained its full-year dividend at US$2.92 per share and completed a A$1 billion buyback. The real catalyst was FY27 guidance for approximately 5% underlying profit growth, compared with market expectations closer to 2%. After an extended period of earnings disappointments, investors interpreted the outlook as evidence that CSL’s core plasma business was approaching a sustainable recovery.

4. Judo Capital (ASX:JDO): +16.9%

Judo Capital demonstrated strong operating leverage as its specialist business-lending franchise expanded. Full-year profit before tax rose 34% to $168.1 million, while pre-provision profit increased 42%. Gross loans and advances grew 18% to $14.7 billion, reaching the top of the bank’s guidance range and comfortably exceeding broader system growth.

Deposits increased 24% to $12.2 billion, return on equity improved by 1.1 percentage points to 6.4%, and earnings per share rose 29% to 9.9 cents. Reaffirmation of the FY27 outlook gave investors confidence that loan growth could continue without sacrificing margins or credit quality.

5. Super Retail Group (ASX:SUL): +15.8%

The owner of Supercheap Auto, rebel, BCF and Macpac reported record sales of $4.2 billion, up 3.2%, despite cautious discretionary spending. Profitability went backwards: normalised profit before tax fell 7% to $306 million and normalised NPAT declined 2.8% to $226 million as transformation spending weighed on margins. Nevertheless, the result exceeded subdued expectations, online sales grew 5.3% and membership across the group’s loyalty programs reached 13.1 million. Investors were also encouraged by positive early FY27 trading, stable gross margins and continued market-share gains. A fully franked 33-cent final dividend added to the appeal.

The five losers

1. Hansen Technologies (ASX:HSN): –21.2%

Hansen’s historic result met expectations, but investors recoiled from its outlook. The utility and communications software provider achieved an underlying EBITDA margin of 31%, exceeding its 30% target, while generating strong cash flow. However, management designated FY27 an “investment and transition year”, signalling a roughly five-percentage-point margin contraction as spending on products, sales capabilities and organisational changes increased.

Revenue had already been broadly flat, leaving investors concerned that the investment program would depress earnings before new growth appeared. Leadership changes, including the chief executive’s departure, added uncertainty. Management expects revenue growth and margins above 30% to return in FY28, but the market was unwilling to wait.

2. Life360 (ASX:360): –19.4%

Life360’s headline growth was impressive: quarterly revenue rose 38% to US$159 million, subscription revenue increased 31%, and adjusted EBITDA climbed 53% to US$31.1 million. Monthly active users reached 102.4 million and paying circles grew 27% to 3.2 million. The sell-off reflected expectations rather than a collapsing business.

Net income fell 18%, the net margin contracted from 6% to 3%, hardware shipments dropped 18%, and full-year EBITDA guidance was merely maintained. After a strong valuation run, investors wanted a larger upgrade and clearer evidence that heavy investment in advertising, international expansion and artificial intelligence would generate additional earnings.

3. PEXA Group (ASX:PXA): –17.0%

PEXA reported a 7% increase in continuing-operations revenue and 12% EBITDA growth to $152 million, accompanied by a two-percentage-point margin expansion. Free cash flow increased 39%, suggesting the core Australian electronic-conveyancing platform remained highly profitable. Investors instead concentrated on management’s warning that property-transfer volumes could decline, alongside regulatory uncertainty surrounding the fees PEXA can charge.

The company is also continuing to invest heavily in its loss-making international expansion. Morningstar considered the market reaction excessive, arguing that structural transfer-volume assumptions had not materially changed, but the combination of softer near-term activity and regulatory risk overwhelmed the respectable headline numbers.

4. SEEK (ASX:SEK): –14.3%

SEEK produced solid FY26 figures, including 10% revenue growth to $1.20 billion, a 15% rise in EBITDA and 28% growth in adjusted earnings per share. It also lifted its fully franked annual dividend by 13% to a record 52 cents. Those achievements were overshadowed by falling paid job-ad volumes and cautious FY27 assumptions.

The statutory accounts included a $201 million loss from the SEEK Growth Fund and $377 million of significant items, making the headline result considerably less attractive. Investors were particularly concerned that economic weakness could limit volumes while the company continued investing in platform integration and artificial-intelligence products.

5. JB Hi-Fi (ASX:JBH): –12.3%

JB Hi-Fi’s full-year result was broadly respectable, with group sales rising 5% to $11.1 billion and underlying earnings per share increasing 6% to $4.48. The damage came from its current-trading update. Australian sales were almost flat during the June quarter and deteriorated further in July, while earnings in the core Australian electronics business fell 3.6%.

Housing-related categories were particularly weak as higher living costs and interest rates constrained household budgets. With JB Hi-Fi entering the season on a demanding valuation, an in-line historic result was not sufficient: the loss of sales momentum prompted investors to rapidly reduce their expectations for FY27.

Overall, the season showed that share prices react less to whether profits rose or fell than to the gap between results and expectations. Bapcor was rewarded for being less troubled than feared, while several fundamentally profitable companies were punished because their outlooks failed to justify elevated valuations.