Tariffs & Real Estate: How Supply Chain Shocks Reshape the Market With Kristian O’Meara – RFP 61 Transcript
Gordon Lamphere (00:05): Hi, I’m Gordon Lamphere, and welcome to The Real Finds Podcast, the podcast where we have real conversations with key entrepreneurs, activists, and researchers who are shaping the real estate industry and, as a result, our world. On today’s podcast, we’ll be speaking with Kristian O’Meara. Kristian is the Senior Vice President of Strategic Initiatives at JAGGAER, a global leader in enterprise procurement and supplier collaboration. On the podcast, we talk about trade, supply chains, and tariffs. Most pressingly, we dive into the asset classes, economic sectors, and regions most affected by the Trump-China trade dispute. If you’re interested in industrial space or manufacturing, and in how the Trump-China trade dispute could affect your portfolio, this podcast is well worth a listen. Kristian, thank you for hopping on the podcast today.
Kristian O’Meara (01:05): Gordon, good morning, good afternoon. It’s my pleasure. I look forward to our discussion.
An Insatiable Curiosity About Supply Chains
Gordon Lamphere (01:11): What got you into the world of global trade and tariffs? How did you first get into the industry?
Kristian O’Meara (01:23): I’ve been in supply chain for twenty-five-plus years. One of my life ethos has always been to maintain an insatiable curiosity. I call it the curiosity of a two-year-old: always ask why, and always turn things inside out. My role is meeting repeatedly with executives at our accounts to help them with their North Star, their trajectory, and their goals, objectives, and KPIs. Tariff topics are of the utmost interest right now. Half of the companies I’ve talked to don’t have a cohesive plan in place. I think that puts JAGGAER in an enviable position to lean in and provide assistance. It’s a good fit from a software and technology enablement perspective. They’ll still need help on the people and policy side, but we have ways to help them make sure the solutions they put in place can be repeatedly analyzed and scaled for their organizations, depending on their size and complexity.
The State of Tariffs: A Tax, and a Lot of Unpredictability
Gordon Lamphere (02:30): At a super high level, what’s going on right now with tariffs on the supply chain side, and what’s the general impact on manufacturing businesses around the country?
Kristian O’Meara (02:48): From my perspective, we’re at a somewhat unprecedented time, probably since about a hundred years ago, when the Smoot-Hawley legislation went into place. That’s a topic for a different day, and probably only likely to hold the interest of the most educationally focused folks. What we’re seeing today, depending on which side of the fence you sit on from a policy perspective, is rather unprecedented. We’ve put measures in place through executive orders that leverage IEEPA or national security authorities as a way to ensure a supply chain that has stability and, I’ll call it, locality.
There’s a great deal of complexity to unpack. I’ve worked with a number of scholars and policy experts to make sure I’m prepared to have that dialogue with my customers. But what you have in place is effectively a tax, paid as goods move in transit into another country. That tax varies greatly depending on the product, the region, and the country of origin. There are exceptions, and organizations like the World Trade Organization keep account of them, so you can navigate those. From a policy perspective, a mechanism like this could be in place for a number of reasons. But the biggest challenge, at a 30,000-foot macro level,
is the level of unpredictability we have with the tariffs right now. We’re in a 90-day pause period, which came about because the bond markets, and the Walmarts and other large retailers of the world, leaned in to tell the executive office, “We’ve got to cool these down. We’ve got to understand the implications and the dollar impact.
Kristian O’Meara (05:08): We’ve got to understand the retaliatory aspects of this. We’ve got to understand that supply chains don’t move overnight.” So there’s a lot to get your head wrapped around as you contemplate your tariff strategy within your organization.
It Comes Down to the Bill of Materials
Gordon Lamphere (05:29): How does that boil down at the component and raw material level? Is this a broad issue across many sectors, or a sector-by-sector, component-by-component issue where some parts of manufacturing or the import market will be vastly more affected than others?
Kristian O’Meara (05:58): Some will absolutely be impacted more than others. Because of the reach, with seventy-plus countries in the executive order announced within the last 30 days, the scope is unprecedented. The majority of our trade, over 90 percent, is done with seven or eight countries, so arguably it impacts those seven or eight countries massively and meaningfully.
The answer is that it varies, because it can be material-specific, as with the tariffs on steel or aluminum. If you’re bringing steel in from Canada, for example, you have to prove compliance to ensure there’s no Chinese content in that steel. In the electronics space right now, they’re sort of smiling, because there’s an exception for the Apples and HPs of the world that was negotiated at the executive office level, on the argument that “we won’t have product to offer, or it won’t be economically viable and will put an undue burden on the population, if you put these in place.”
So it depends on what sector you’re in and what goes into your products. A concept constantly discussed in supply chain is the bill of materials: the parts and pieces that make up your cost of goods sold, whether that’s an integrated circuit board or the raw plastic that goes into an automobile part. You have to understand the impact on the different components within your products, not just on the products themselves.
Retail Shelves and China’s Manufacturing Scale
Gordon Lamphere (07:47): Where do you foresee the biggest disruption in terms of individual products? And should we be most worried about China, since that market doesn’t currently have the same pause we’re seeing elsewhere? Is that where importers and manufacturers should be most concerned?
Kristian O’Meara (08:17): From my perspective, the folks who have gotten the executive office’s attention most acutely are the retail leaders. Home Depot, Walmart, and others approached Trump last week and let him know that by July, and the July Fourth holiday in particular, with the weeks before it being a major retail event, there will be empty store shelves. Is that shock and awe? Is it exaggerated? I don’t know that it is.
China specifically and acutely will continue to matter. Its manufacturing capacity is the same size as the next nine largest countries combined. Our GDP is about 8 percent manufacturing, and if you take out the administrative and executive leadership jobs in the manufacturing sector, less than 4 percent of our economy is driven by manufacturing. If we want to receive goods and products from the rest of the world, and we are a global supply chain today that cannot change overnight, or even within four years, we have to be prepared for some impacts.
Operating Through Policy Uncertainty
Gordon Lamphere (09:38): There will be some impacts with very limited workarounds, where maybe the only workaround is higher costs. But are there operational re-engineering tools businesses can use to restructure their supply chains? Or are we just, pardon my French, out of luck?
Kristian O’Meara (10:00): I think the most challenging thing for senior executives right now is the policy uncertainty. One of the three major arguments I hear bandied about is that we want global manufacturers to relocate here, like BMW in South Carolina or Honda in Marysville, Ohio. We want them on our shores for security, national defense, and job availability, and jobs have a very clear impact on voter turnout. But something has to clearly happen. We cannot sustain this level of unpredictability, with tariffs on again, off again, stopped, and paused.
Most of my customers have an A strategy and a B strategy, but they can invoke neither right now because of the uncertainty. It would be somewhat risky to say, “We’re going to open a new location in Canada to sell goods and services and minimize our tariffs,” when this could all be reversed.
Some argue that if it isn’t done by the courts over the next 12 months, surely by the midterm elections there will be implications. At town halls, representatives from the Hill are hearing quite clearly, “We didn’t ask for this. We weren’t looking for this. This isn’t what we expected, and it’s creating economic risk.” If Trump doesn’t want his legacy to be a recession on his watch, I think there are folks very concerned about those implications, including him. So I anticipate a great deal of clarity emerging over the course of this 90-day pause, and folks are suggesting an off-ramp should be contemplated and investigated. What I hear most from the scholars, including
Kristian O’Meara (12:19): Marc Busch, whom we spoke with recently, is that the end goal could be relocating supply chains to North America. But there’s complexity in that, and it’s not done overnight. Look at what Honda did in Ohio over the last 40-plus years. It took a long time before they had co-located capabilities. Look at what Nissan did in Tennessee or BMW in South Carolina. Those multibillion-dollar investments all took time to stand up. The CHIPS Act chip manufacturing facility here in Ohio is $8 to $10 billion per plant. They’re building two of them, a $20 billion investment, and it’s going to take five years to come online. These aren’t small investments.
Nearshoring or Tariff Avoidance?
Gordon Lamphere (13:19): We recently sold a 200,000-plus-square-foot manufacturing facility in Lake County belonging to a German company, and it was a multiyear effort to get that business to come here in the first place. They’re remaining strong here, just under different management. Beyond trying to foresee and structure around stability, one big concern we’ve seen with onshoring, or at least nearshoring, is whether it’s actually onshoring or nearshoring, or just a mechanism to avoid tariffs. Several manufacturers we’ve dealt with have mentioned offhand that some of their nearshoring through Mexico was really just a repackaging business before moving goods into the United States. Is that where some of the concern about Canada, Mexico, and the United States is coming from? Or is it just a Trump rah-rah push to move as much manufacturing as possible into the US proper?
Kristian O’Meara (14:47): There are always tax minimization strategies at play. Any good executive, and any high-net-worth individual in your network, is going to look for ways to minimize their tax burden. When we talk about tariffs, exceptions to tariffs, and looking up the codes through the World Trade Organization, one thing Marc suggested to our audience last week was to get your head around the exceptions process. The example he used was chemicals. Chemicals have always carried a high tariff burden, and that will be exacerbated by the current situation. But if you bring chemicals in and simply add a towel, it becomes a kit: a towel you apply the chemicals with, sold to the consumer as a kit, and you can minimize your tariff burden.
So have the right understanding of the tariffs. If you’re a small business, or several small businesses, consider spending a small amount of money on joint legal counsel, some sort of group effort, to figure out how to minimize your tariff burden. With nearshoring and onshoring, there are ways to be creative, and depending on the tariff in question, there’s more or less room for creativity. Becoming, or hiring, a quasi-expert to get your head around these things, and spending a small amount on legal teams that can help you apply for relief, could be a very high-value activity.
What It Means for Commercial Real Estate: Steel Tariffs and Transparent Bids
Gordon Lamphere (16:36): We’d love to talk about how this will affect commercial real estate markets, both short term and long term. Most of our audience are commercial real estate investors, developers, or brokers, and their primary concern is going to be, “How does this affect my pocketbook?” How do you see these trends playing out in the markets, and which could be the winners and potential losers?
Kristian O’Meara (17:13): For your audience in general, there are things like the steel tariffs where I don’t necessarily anticipate much modification. The broad seventy-plus-country tariffs, I anticipate, will find some easing, whether through legislation, the executive office, or the courts. I expect there will be fewer tariffs in place. But the steel tariff matters for major build-outs, whether residential or commercial properties, which involve a great deal of steel, concrete, and similar materials. How do I ensure I have local sources for that steel?
Last week, I heard a story from a customer who has an AI that was invented for the grocery industry to test the origin of products that end up on store shelves. They’re now using it to test steel content to ensure there’s no Chinese content. At JAGGAER, we encourage technology enablement across these challenges. To get flexibility and be able to consider trade-offs, you can do a China-plus-one analysis in something we call Advanced Sourcing Optimizer. That’s a fancy way of saying: when you go to market, whether through a GC or directly to your subcontractors, ensure you have transparency within your RFP.
Or leverage technologies like JAGGAER for RFP sourcing and tendering to get some granularity in the bids. We hear about a lot of subcontractors raising prices and then not having clawback provisions when the tariffs were turned off. My brother is a small business owner who sells window coverings. One of his suppliers put through a 30 percent increase, said it was because of tariffs, and said that even though the tariffs are paused, they’re not taking it off.
Kristian O’Meara (19:36): The complexity he then has to pass on to his customers, and the implications for their top line, are real considerations. So even something as small as window coverings in your commercial properties is a real consideration. On the tech side, we also have great AI capabilities with large language models, ChatGPT-type capabilities, where you can conversationally engage with your contracts, understand the provisions and terms and conditions in your agreements, or put a legal template in place going forward to protect yourself. Those are all things leaders can consider, from a proper planning perspective, to minimize the impact on their customers or their investors.
The Regions Most Exposed: Border Markets and the USMCA Review
Gordon Lamphere (20:29): That makes a lot of sense. With onshoring, nearshoring, or potential tariff hiccups, do you think certain regions of the United States will be most affected, whether negatively or positively, in the short term or over the next five years?
Kristian O’Meara (20:56): You naturally have to look at your border areas, those closest to Mexico, and the Canadian border, which is vast. There’s talk of softwood lumber tariffs, for example, and that’s a huge resource we get from Canada. The agreement with Canada and Mexico that was signed into law has a sunset provision next year. That’s incredibly unusual for a free trade agreement, but it has one, and it’s coming up next year. So one could argue some of this is prepositioning for leverage in those negotiations. There are exceptions in some of the auto tariffs for products originating in Mexico or Canada. The automobile companies fought aggressively, because they have effective lobbyists who’ve been making sure their voices are heard for a very long time.
I encourage leaders within your companies to let their representatives know the impact. Everybody loves a good story, the Joe the Plumber story. The press creates echo chambers around the impact on small businesses. If business owners get those messages out through the press and to their representatives in DC, those representatives can think about ways to minimize the tax or tariff burden. And we have to be very cautious about the lack of predictability, because investment happens with predictability, and uncertainty holds it back, which brings us full circle to where I started.
Those are practical things people can do to prepare. There’s 2026, and the midterm elections, which are opportunities for people to have their voices heard. In the interim, make sure your voice and your impact as a small business are heard: “I won’t be able to bring this investment into my local community, because the steel tariffs have raised the cost of the building and our investment can’t carry that.”
The Biggest Risk: A Supply Chain Without Flexibility
Gordon Lamphere (23:23): If you’re an investor in private markets or REITs looking at a variety of manufacturing businesses or regions, where do you see the biggest risk, given how the trade war and tariffs are structured?
Kristian O’Meara (23:45): The biggest risk, from my perspective, is failing to ensure a diverse and flexible supply chain and strategy. Back to the tech stack, one capability is the concept of expressive bidding. We used to say, “Give us a bid on this.” Now we can engage our supply market with, “I want multiple bids. Give me three, four, or five bids. Give me a bid where, if I sustain a certain level of business with you, you’ll make a capital investment.” Being able to analyze multiple supplier bids rapidly and iteratively, outside of spreadsheets, so you maintain elasticity, or resiliency, which is the term being bandied about right now, is incredibly important now more than ever. I thought most folks would have gotten their heads around these challenges during the pandemic, but this one has enough unique particulars that folks are having to go back to basics. How do we do this at scale? How do we analyze, and then reanalyze when things change? The only constant is that things will change.
Building a Tariff Playbook
Gordon Lamphere (25:09): As soon as we’re prepared for another biologically driven black swan, a political black swan hits us. Before we get into our final four, what do you think are the most effective mitigation tools manufacturers, or anyone importing in general, can use to avoid supply chain risks and general price increases?
Kristian O’Meara (25:52): In this case, I’d call it a strategic imperative to have a tariff playbook. The concept of a playbook has been around a long time and won’t go away. Like you said, there will always be a next challenge to deal with. I have a checklist I encourage people to go through, from analysis all the way to execution. It starts with agility and moving with what I call velocity. I specifically choose velocity over speed, because velocity implies direction as well as speed. Get through your data and have your steps and scenarios sorted. What scenarios could play out?
Start with analysis, document your strategies, have contingencies, and start executing your plan. You’ve heard the term “fail fast,” but be willing to revisit and optimize your plan. Have strategies in place so you understand your exposure, all the way through to pricing guidance: understand how you can mitigate it and how you can avoid it.
I’m also a big proponent of third-party intelligence. When I started my career, running a large sourcing event, say half a billion or a billion dollars, required a big investment in an RFP or auction. You had to research the market, the category or categories, and the suppliers involved. Now, at a very affordable price, you can get what used to take two to three months of preparation 20 years ago through AI. You can conversationally get information on markets and categories in an area we call supplier intelligence. It costs thousands of dollars and can help you avoid potentially millions. And Gordon, I really encourage people to maintain a war-room mentality. Get the best and brightest from your cross-functional teams,
Kristian O’Meara (28:12): bring them to the table to brainstorm, and apply maximum creativity to get the most resilient outcome possible.
What the Public Gets Wrong About Tariffs
Gordon Lamphere (28:23): One of the ways we try to pursue resilient outcomes is to sift through some of the, pardon my French again, BS in the media landscape. There’s a lot of misinformation out there. If you could hit one of the biggest myths on the head, what do we as the general public get most wrong about tariffs and the trade war?
Kristian O’Meara (28:57): Most people generally aren’t aware of tariffs and don’t understand them. Marc walked us through the two major inflection points in Google searches for tariffs last year, and I’ll tell you, the searches for Taylor Swift he showed were a hundred times the searches for tariffs. So what does this mean for us, and how do we minimize it? Tariffs were pitched as a way to give small businesses tax relief because we could raise money through tariffs. There is no way, no how, that we can offset the roughly two trillion dollars that comes in through personal income taxes. Tariffs today bring in about 80 billion dollars. There’s no way we can make up for personal income taxes that way.
So be aware of it and follow it closely. It’s going to change, whether through the House and Senate standing up and doing something, through the courts, or through the midterm elections, because the American populace will speak up. You can anticipate it will change again. Be prepared, and understand that his potential off-ramp is this foreign direct investment, the examples we talked about, incentivizing companies to co-locate here so we get jobs and continuity. But economists have proven time and again that the lifeblood of America remains
our small businesses. American exceptionalism has been around for a long time. With this latest wave of AI, I heard conversations yesterday suggesting our GDP growth could go to four and then six percent over the next ten years. American exceptionalism is here to stay, and I think we have that to ride out. We have resiliency in our populace and in our small businesses, with continual investment and reinvestment,
Kristian O’Meara (31:17): and hiring that will take place, because AI is a transformational change. It’s significant and meaningful.
The Final Four: AI Will Transform Global Trade
Gordon Lamphere (31:27): One of the meaningful things we like to do on the podcast is our Real Finds Final Four. It’s a nice way to wrap up and learn a little more about you and where you think the future of your area of expertise, tariffs and global trade in general, is going. First: what do you think will have changed the most about global trade ten years out?
Kristian O’Meara (32:03): As it relates to global trade, AI is 100 percent going to be the transformational change. I’m a big fan of mentoring. I got where I am because people leaned in and paid it forward in me, as we say in the Buckeye State, and I’m trying to return that to others. I mentor our AI intelligence leader within our organization. AI is going to transform global trade substantially, including our ability, as we talked about, to use it to get across our contractual terms. You’ve heard of machine learning, and of LLMs like ChatGPT. The next phase being bandied about is agentic AI: agents that take action for us. In the supply chain world I live in, there’s a tremendous amount of paperwork and digital data at the more mature organizations. Getting our heads around predictive and prescriptive analytics with AI that humans can engage with, to manage safety stock levels, inventory levels, and the implications for working capital, is absolutely exciting. It gives me goosebumps to talk about where we’re going to head based on the transformation AI will deliver. That would be the first one I’d hit for you.
Advice for Young Professionals: Accountability and Adaptability
Gordon Lamphere (33:38): Besides looking to the future, we like to look back at the past. We have a lot of listeners under the age of 30, and we’d be curious what advice you would have given yourself when you were starting out in your career.
Kristian O’Meara (34:04): I’m thankful for those mentors. At a foundational level, we have three values at JAGGAER, and accountability and adaptability are absolutely paramount. The one thing you can be sure of is that you need to build in accountability to yourself. You have one name, one reputation, and one way to build trust, and having that at the core of what you do will not change. Introduce AI, introduce computers, and there will be distrust and mistrust. So how do I make sure I’m accountable to people? Adaptability is also hugely important. You must constantly reinvent yourself as an entrepreneur, even internally at your own company. Despite being here twenty-five years, it’s incredibly important to revisit that, think about what’s changing, and predict it. Those are the two things I’d whisper to myself if I could go back in time.
Book Recommendation: Rich Dad Poor Dad
Gordon Lamphere (35:18): Outside of reaching out to a mentor, one of the ways we get mentorship is through books, podcasts, or periodicals, anything that gives us insight into the mind of another and into an industry. If you could recommend one book that would positively influence someone’s career, what would it be?
Kristian O’Meara (35:51): For your audience in particular: I happen to be a small real estate investor. I started investing in rental properties in a campus community while I was in school, because I had my own small commercial and residential painting business. I read the Rich Dad Poor Dad series. I think Robert Kiyosaki did a great job in those books of building a mindset for looking at problems in a fundamentally different way. I challenge and mentor folks to think unconstrained. I think that’s a fundamentally critical skill for an executive leader or an entrepreneur. First think unconstrained, then layer in your constraints and talk about risk mitigation strategies. Especially as it relates to real estate investment, that series helped me think not just through the financial numbers, which are incredibly important, but in nontraditional ways, constantly looking for a cheaper, more efficient, more effective way to do things, whether in my repair and maintenance schedules or my lease agreements.
Who Should Be Our Next Guest?
Gordon Lamphere (37:11): Robert is a terrific way to get your foot in the door in real estate and to change the way you perceive the world. One of the ways we look at how we perceive the world, and the gaps in our own mindset, is by talking to people like yourself. This is the whole reason for the podcast, so we’re not going to let you out of this question: who’s the next person we should have on?
Kristian O’Meara (37:44): I really like the question. If you want to stay on the tariff topic, I was enthralled listening to Marc Busch. He’s a professor, a Reagan conservative, and he can take a seemingly dry topic like tariffs and get people sitting up in their chairs, paying attention, and understanding the history behind them and, more importantly, the variations. So I’d encourage you to reach out to Marc, and I can facilitate an introduction if you like. That would be a great place to continue the tariff topic.
How to Reach Kristian O’Meara
Gordon Lamphere (38:32): We’d love that connection. If somebody wants to connect with you after listening to the podcast, what’s the best way to get in touch?
Kristian O’Meara (38:39): Reach out via LinkedIn. You’ll see my initials there, KO, for Kristian O’Meara, so search “K O’Meara JAGGAER.” My mobile number is available on LinkedIn as well. That’s a great way to start the engagement, and I look forward to those discussions.
Gordon Lamphere (38:59): Kristian, thank you so much for hopping on the podcast today. We really appreciate having you on.
Kristian O’Meara (39:04): Thanks, Gordon. Have a great afternoon.
Gordon Lamphere (39:06): Thanks again to Kristian. We appreciate his insights. If you enjoyed the podcast, please give us a like and a five-star review. Your subscriptions and interactions truly matter and help us continue to bring on quality guests. You can find us on YouTube, Spotify, or wherever you get your podcasts. I’m Gordon Lamphere with The Real Finds Podcast. Thank you for listening.
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