President Donald Trump has a “monumental task” ahead of him as he looks to balance the global supply chain – a shift that former Home Depot CEO Bob Nardelli says could take two decades or more to reverse years of globalization and fully feel the effects of change.
“He’s taken on probably the most difficult and challenging initiative in the history of our globe,” the business leader said Tuesday on “Fox & Friends.”
“Trying to balance the global supply chain is a monumental task – the level of complexity, the relationships with countries… if you look at it, we’ve developed a tote board to try and keep up with the rate of change. We put the tariff there by country, and as they change and initiatives and exceptions are made, put in the number and boom, it rolls down.”
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“Now we know our exposure to the cost of the tariffs,” he continued.
One of the companies Nardelli is involved with sources parts from 60 countries to build airframes.
He also pointed to the deep globalization involved in assembling a crutch of the automotive industry – the internal combustion engine, which is built from components manufactured around the world.
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“Even in the case with retailers, the number of components and products that come into Home Depot, Target, Lowe’s is an overwhelming number, and it’s gonna take a while to reverse something that’s been on this globalization for maybe two decades or more,” he said.
Nardelli’s comments came after Trump met with big-name U.S. retailers on Monday and as ongoing trade fears rattle Wall Street.
The president’s trade policies have actively sought to restructure how and where goods are made and moved across the globe, with the primary goal of reshoring production domestically and reducing U.S. reliance on foreign countries like China.
Nardelli said the fear of higher prices, which is driving some consumers to buy before the sticker shock takes effect, could offer a bump in the overall GDP.
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With cars, for instance, consumers may be buying right now, but by evidence of running Chrysler during tough economic times in the past, Nardelli says consumers will shift to used cars — driving up the costs of such vehicles. Other consumers will keep the cars they have, and the move will benefit the auto parts industry.
“We’re very adaptive as a consumer base,” Nardelli said.
“We’ll have to make some sacrifices, but if he pulls this off, this is really one of the most pervasive and probably positive initiatives this administration could do for us [in the] long term.”
