Global corporations rushed out of China to dodge tariffs during President Trump's first term. This time around, they have nowhere to hide — and policy is changing faster than supply chains can.

Why it matters: With high tariffs set to go into effect tomorrow in nearly every nation, there is no shield to be had (barring last-ditch negotiations or suspensions). It means multinational companies can't duck import taxes by rerouting goods.

• Companies will look to adapt their sourcing to minimize tariffs. But the trade policy landscape is shifting day by day, and complex multinational supply chains take much longer to redesign.
• That makes some hit to prices and/or corporate profits inevitable, even if over time there are opportunities to shift activity to lower-tariff countries.

What they're saying: "Once the dust settles, I think you're going to see companies looking at basically tariff arbitrage possibilities," Bill Reinsch, a senior adviser at the Center for Strategic and International Studies, told reporters at a briefing yesterday.

• "Which is: 'Can we shift our supply chains to countries that have lower tariffs? So instead of paying 46% from Vietnam, if we can pay 26% in India, that's worth looking at," said Reinsch, who previously led the National Foreign Trade Council.

Flashback: This is similar to the go-to strategy throughout the first phase of the U.S.-China trade war in 2019.

• Companies adjusted their sourcing and supply chains out of China to Southeast Asian nations like Vietnam and Cambodia, which were key beneficiaries.
• It is what gave some companies confidence they would not bear the brunt of tariffs in Trump's second term.

"What you've really seen happen is there's been a lot of suppliers who built manufacturing capabilities in Cambodia, in Vietnam, in Malaysia, Indonesia, other places so that they actually have more control over their future, should the tariff landscape change, etc.," Niraj Shah, CEO of online furniture retailer Wayfair, said on an earnings call in November.

• "I think we have kind of a couple benefits going for us: One is that the industry is definitely in a different position than it was five years ago," Shah added, noting Wayfair's network of suppliers in countries like Brazil and Europe.

The big picture: Before Trump 1.0, trade policy shifts never happened overnight. The trade backdrop that defined global manufacturing lasted for decades.

• In Trump's first term, tariffs were more targeted than they are this time around: mostly lower, and implemented through authorities that required lengthy periods of study and consideration of exemptions.
• That gave companies more time to plan ahead and argue their case for exclusions.

State of play: This time around, things are broader and faster-moving, with reciprocal tariffs on nearly all goods from nearly every country set to go into effect a mere week after they were announced.

• It raises the risk that companies will be hesitant to make the long-term, expensive investment decisions Trump officials say will reap U.S. economic benefits.

The bottom line: What executives "have to keep in mind is that no matter what they do, it's going to be more expensive and less efficient than what they've been doing now," Reinsch said.

• "They have to, I think, resign themselves to a more complicated world, but there are opportunities for relative improvement as long as there are differential tariffs."

Stephen Miran, chair of the White House Council of Economic Advisers, delivered his first speech in that role yesterday. He made a sharp call for other countries to shoulder more of the costs of the global "public goods" that the United States has provided for decades.

The big picture: In the economics of Trumpism, as articulated by Miran, the U.S. has been a sucker for providing the global reserve currency and a worldwide defense umbrella without adequate compensation by the rest of the world.

• This has been a through-line of Trump's economic thought for decades. The speech is a reminder that in this term, he is surrounded by advisers who share this sense of grievance.

What they're saying: "President Trump has made it clear that he will no longer stand for other nations free-riding on our blood, sweat, and tears, whether in national security or trade," Miran said at the Hudson Institute.

• He argued that the primacy of the U.S. dollar in global finance and trade — long viewed by American diplomats and economists as a source of strength — has carried downsides.
• "While it is true that demand for dollars has kept our borrowing rates low, it has also kept currency markets distorted," Miran said.
• "This process has placed undue burdens on our firms and workers, making their products and labor uncompetitive on the global stage," fueling the loss of manufacturing jobs, he said.

Between the lines: This is a departure from the mainstream view that the dollar's dominance in the world economy generates exorbitant privilege, including investment inflows, lower borrowing costs, higher consumption, and the ability to exert world influence.