A national security investigation into truck imports could lead to tariffs.
May 12: Just as container shipments coming into West Coast ports were drying up, President Trump announced a temporary tariff deal with China that will likely lead to more volatility in global logistics.
The White House on May 12 announced it has suspended “reciprocal tariffs” against China for 90 days. That leaves a 30% tariff on imports from China, with the broad-based 10% still in effect plus a 20% tariff related to fentanyl.
Some logistics experts are predicting another rush as companies try to get ahead of possible increased tariffs after the 90 days are up.
Paul Brashier, vice president of global supply chain at ITS Logistics, told CNBC that he expects a surge of container imports from China over the next four to six weeks.
Some companies, such as sellers of holiday merchandise like toys (the vast majority of which come from China) or supply critical goods like healthcare products may well use this time to restock.
However, others points out that at 30%, tariffs on imports from China are still high.
At the very least, there will be a four- to six-week lag as containers must cross the Pacific before they arrive on U.S. shores where drayage truckers will move them out of the ports.
POLB Exec: ‘A Moment of Radical Uncertainty’
The Port of Seattle last Wednesday reported that there were no container ships docked at its terminal — something it hadn’t seen since the COVID-19 pandemic. And NPR reported last week that cargo at the LA ports was down 35% compared to the same week last year.
“We’re in a moment of radical uncertainty,” Port of Long Beach Executive Director Mario Cordero told Newsweek. In a typical week, the Port of Long Beach expects about 17 vessel arrivals. This week, Cordero told Newsweek, the port is expecting only three or four.
Port of Los Angeles Executive Director Gene Seroka said he doesn’t expect a surge of imports. “It’s not going to dramatically change what we’re seeing right now,” he told the Wall Street Journal, as the LA Port noted in a LinkedIn post.
In a statement, Seroka called the 90-day pause “welcome news for consumers, American businesses, workers and the supply chain.”
However, he said, “Even with this announcement tariffs remain elevated compared to April 1.”
Just last Friday, the Global Port Tracker report from the National Retail Federation and Hackett Associates said import cargo at the nation’s major container ports was expected to see its first year-over-year decline in over a year and a half this month because of tariffs.
Investigation into Truck and Parts Imports Could Lead to Tariffs
April 24: The Trump administration is looking into the national security implications of imports of medium- and heavy-duty trucks and parts for them. This investigation could lead to tariffs for imported trucks and parts.
The vehicle and import tariffs President Trump announced earlier this year focused on light-duty vehicles but did not include medium- and heavy-duty trucks.
Any tariffs would affect Mexico, the largest exporter of trucks and parts to the U.S. Canada and Japan are also major exporters to the U.S.
On April 22, the Secretary of Commerce started an investigation under section 232 of the Trade Expansion Act of 1962. This law allows the president to take action on imports — such as tariffs — if they are found to threaten national security.
This is the law Trump used earlier this year to impose higher tariffs on steel and aluminum.
Normally, Congress is in charge of setting tariffs. President Trump has used national security and declaring a state of emergency to justify his authority to set tariffs. His back-and-forth swings and changing decisions on tariffs has rattled Wall Street.
What is the Commerce Department Asking About Truck Imports?
A notice scheduled to be published in the Federal Register April 25 asks for comments as part of the investigation.
The Commerce Department is asking for information and comments on:
- The current and projected demand for trucks and truck parts in the United States.
- The extent to which domestic production of trucks and truck parts can meet domestic demand.
- The role of foreign supply chains, particularly of major exporters, in meeting United States demand for trucks and truck parts.
- The concentration of United States imports of trucks and truck parts from a small number of suppliers and the associated risks.
- The impact of foreign government subsidies and “predatory trade practices” on the competitiveness of the medium- and heavy-duty truck industry in the United States.
- The economic impact of artificially suppressed prices of trucks and truck parts due to “foreign unfair trade practices and state-sponsored overproduction.”
- The potential for export restrictions by foreign nations, including the ability of foreign nations to “weaponize their control over supplies of trucks and truck parts.”
- The feasibility of increasing domestic capacity for trucks and truck parts to reduce import reliance.
- The impact of current trade policies on domestic production of trucks and truck parts, and whether additional measures, including tariffs or quotas, are necessary to protect national security.
Environmental group The Sunrise Project said the investigation and potential tariffs will add more uncertainty to the trucking industry and sales of electric trucks.
“Trump is already pummeling truckers by cratering shipments with his illegal tariffs,” said Craig Segall, senior environmental consultant and former Deputy Executive Officer of the California Air Resources Board, in a statement. “This new inquiry looks to add yet more costs and disruption to no clear end.
“The right economic strategy isn’t whatever this is. It would be to focus on affordable zero-emission trucks to cut fuel costs for truckers as part of an electrified, reliable, supply chain — and protecting kids along truck routes from asthma from diesel fumes.”
Previous Tariff Updates
April 15: Are Pharmaceuticals and Chips Next on Tariff List?
Trucking companies that haul a lot of pharmaceutical or semiconductor freight could be affected if the Trump Administration levies new tariffs on these commodities — and new actions from the administration appear to be laying the groundwork for such tariffs.
According to the New York Times, the administration has begun national security investigations into imports of semiconductor chips and pharmaceuticals, likely the first step in assessing tariffs based on national security.
According to published reports, President Trump has repeatedly said he is looking at tariffs for these categories, including last week at a dinner of the National Republican Congressional Committee saying his administration would be announcing a major tariff on pharmaceuticals.
Also included in the investigation are the machinery used to make semiconductor, as well as products that contain chips and ingredients used to make pharmaceuticals.
A huge majority of U.S. prescriptions are for generic drugs, which are typically made overseas. So are most of the raw materials needed for making drugs.
As FTR’s Avery Vise explained in a recent column, “the pharmaceuticals industry is reshaping parts of the U.S. economy in ways that require us to dig a little deeper when trying to analyze the ramifications for freight.”
April 9: Trump Backs off on Some Tariffs, at Least Temporarily
After his announcements of tariffs last week caused stock market turmoil and backlash from investors, voters and even fellow Republicans, President Trump on April 9 reversed course in a surprise move, saying he was pausing his “reciprocal” tariffs for 90 days.
White House press secretary Karoline Leavitt told reporters that the tariff rate for most countries would be brought down to 10%.
One big exception that could still have major impacts on trucking: China, one of the U.S. biggest trading partners. The president instead announced that he would instead raise tariffs on Chinese imports to 125% after the Chinese government announced retaliatory tariffs on U.S. goods.
How long that will be the case is anyone’s guess. Trump told reporters he expected the Chinese government to reach out to him about making a deal in response to the latest tariffs.
Tariffs on Canada and Mexico remain unchanged, including the exemption for goods trading under the U.S.-Mexico-Canada Agreement, according to the New York Times. The baseline 10% “reciprocal” tariffs Trump announced last week did not apply to Canada and Mexico.
According to published reports, Trump told reporters that he intends to move forward with other new tariffs, including on pharmaceuticals and foreign steel.
Amidst all the uncertainty, at least one fleet management company has responded with a plan to trucking companies plan for any price adjustments on heavy-duty trucks from OEM partners. Fleet Advantage announced a strategic Tariff-Readiness program.
Will China Tariffs Wreak Havoc on West Coast Ports?
Goods from China, of course, are a large part of the imports coming in to West Coast ports.
In an interview with Politico last Friday, Gene Seroka, executive director of the Port of Los Angeles, said he’s expecting a drop in cargo at the port in the second half of the year, at least 10%.
Part of that is the expected higher prices on goods as importers pass along tariffs to their customers. If tariffs end up being less than was announced last week, that might not be as big a problem.
But the other reason he’s expecting a drop has already happened — the fact that companies have been frantically bringing in imports ahead of expected tariffs going into effect.
“A lot of folks have brought in so much cargo, it’s already here, and they don’t need to keep buying at that pace.”
Before this latest news about a tariff pause, the National Retail Federation said a new report predicted import cargo at the nation’s major container ports would drop dramatically beginning next month.
The Global Port Tracker from NRF and Hackett Associates said imports during the second half of 2025 were expected to be down at least 20% year over year.
Even balanced against elevated levels earlier this year, that could bring total 2025 cargo volume to a net decline of 15% or more unless the situation changes, said Hackett Associates Founder Ben Hackett.
“In this environment of complete uncertainty, our forecast for import cargo will be subject to significant adjustments over the coming months,” he said.
“Retailers have been bringing merchandise into the country for months in attempts to mitigate against rising tariffs, but that opportunity has come to an end with the imposition of the ‘reciprocal’ tariffs,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold on April 9.
Source: National Retail Federation
April 2: Trump Announces Broad “Reciprocal” Tariffs
President Donald Trump announced broad reciprocal tariffs on U.S. trade partners on April 2, higher than many had expected, leading to concerns about the economy and truck freight.
The president also confirmed his administration will impose 25% tariffs on auto imports from other countries, including Canada and Mexico, starting Thursday, April 3, at 12:01 a.m. The auto tariffs only apply to light-duty vehicles, not to heavier medium-duty and heavy-duty commercial trucks, but the new 10% “reciprocal” tariffs could affect the industry.
As manufacturers and retailers pass along at least some of those tariff costs to their customers, there could be fewer products purchased and less freight generated.
Trump announced a baseline tariff of 10% across all countries — more for those he called bad trade partners — which will go into effect on April 5 at 12:01 a.m. ET. Trump did say he’s exempting Canada and Mexico from that 10% baseline tariff.
And it appears that Canada and Mexico are still subject to a 25% tariff that was first announced earlier this year, then put on pause twice, with goods covered under the United States-Mexico-Canada Agreement exempted.
In addition, a new tariff on imports of steel and aluminum took effect on March 12.
Trucking enjoyed a surge in freight activity the past couple of months as U.S. companies rushed to move more imports into the country before the tariffs.
How Will Latest Tariffs Affect Trucking?
CNBC reported that this frontloading of imports corresponds to a steep decline in new freight order activity.
Hamish Woodrow, head of strategic analytics at Motive, told CNBC the company was expecting to see a drop as soon as the next two weeks.
Over the weekend and leading up to the tariff announcement, Uber Freight “saw an extraordinary volume of trucks moving northbound from Mexico into the U.S., particularly along the IH35 corridor,” said Jose Guerrero, director of U.S. Customs Operations, in an email from Uber Freight.
“Some importers held back shipments until the news was confirmed, while others rushed to move goods ahead of potential disruptions. This pattern suggests shippers are closely monitoring trade policy and adjusting their strategies in real time.”
ATA’s Spear: Good News, Bad News on Tariffs
American Trucking Associations chief Chris Spear, in an email to members, pointed out that Trump’s announcement excluded additional tariffs on Canada and Mexico, which he called a welcome reprieve as it relates to cross-border freight.
“You may recall that goods from Canada and Mexico that are not USMCA compliant already have a 25% tariff due to ‘lax border security.'” He explained.
Therefore, USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will continue to see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff, according to the White House.
“The news today follows last week’s announcement of 25% tariffs on automobile imports, which also excluded heavy-duty trucks — another welcome reprieve for our industry,” Spear said.
“That said, the tariffs announced today have potential to depress freight volumes and increase equipment costs for our industry. We continue to express these concerns directly to administration officials. Our team is currently poring over the details of today’s announcement, and we’ll be assessing its impact on motor carriers and our supplier partners.”
Tariffs and the Economy
The National Association of Manufacturers said it is still evaluating the details and implications of the new tariffs, but in a statement said, “The high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.”
“Tariffs add cost pressures to an already fragile manufacturing sector,” explained Mazen Danaf, Senior Economist, Uber Freight, in an email to HDT.
“Supply chain executives are signaling concerns that higher trade barriers will lead to reduced production, job cuts, and rising inflation. The latest Purchasing Managers Index (PMI) data confirms a slowdown, with manufacturing output and new orders declining.
“Meanwhile, the cost of raw materials is surging — March saw price increases across all major industries surveyed. These signals suggest that businesses are bracing for economic headwinds, reinforcing how critical it is to maintain supply chain resilience in an uncertain environment.”
The National Retail Federation issued a statement saying that “More tariffs equal more anxiety and uncertainty for American businesses and consumers. While leaders in Washington may not care about higher prices, hardworking American families do.
“Tariffs are a tax paid by the U.S. importer that will be passed along to the end consumer. Tariffs will not be paid by foreign countries or suppliers,” added the NRF.
Normally, the U.S. Congress would be in charge of implementing tariffs. The Trump administration has claimed authority by declaring “national emergencies.”
The tariffs announced against Canada and Mexico earlier this year were in response to a fentanyl emergency. The latest tariffs are the result of an emergency “arising from conditions reflected in large and persistent annual U.S. goods trade deficits.”
MARCH 27: Tariffs on Cars and Light-Duty Trucks
President Donald Trump has ordered a 25% tariffs on all cars and light-duty trucks imported into the U.S. starting April 3.
The executive order also says there will be 25% tariffs on specific auto parts imported into the country, with a date to be determined but no later than May 3.
The new tariffs are aimed at cars and light-duty trucks and do not appear to affect heavier medium- and heavy-duty commercial vehicles.
It appears that there may be a way for automakers to qualify for “preferential tariff treatment under the USMCA,” according to the executive order.
The United Auto Workers praised the move, but critics are concerned that the tariffs could raise car prices.
The European Automobile Manufacturers’ Association (ACEA), which represents both auto and commercial truck makers, said Thursday it was “deeply concerned” by Trump’s announcement of additional tariffs.
Steel, Aluminum Tariffs; Canada and Mexico Tariffs Loom
The president’s 25% steel and aluminum tariffs went into effect March 12. The U.S. Chamber of Commerce said tariffs are raising prices for steel and aluminum overall which will contribute to higher prices for manufacturers and raise the cost of living for consumers.
U.S. steel benchmarks are now roughly twice world prices. Aluminum prices are also up sharply as more than half of U.S. demand is met by imports, most of which come from Canada, said John G. Murphy, Senior Vice President, Head of International, in a March 12 post.
The latest tariffs are on top of tariffs on goods coming from Canada and Mexico, which the president last month postponed until April 2.
The day after he announced the automotive tariffs, President Trump threatened even larger tariffs on the European Union and Canada if they worked together to do “economic harm to the USA.”
March 6: Mexico and Canada Tariffs Postponed at Last Minute
Uncertainty about President Trump’s plans for tariffs on the United States’ biggest trading partners continues as he postponed tariffs on most products coming from Mexico and Canada.
Trump announced on social media Thursday, March 6, that he would delay tariffs on most goods coming from Mexico for one month, until April 2. Later in the day he added Canada.
The move appears to build on a March 5 announcement of a one-month reprieve on tariffs for the automotive industry on 25% tariffs on Canada and Mexico. That tariff exemption applies to autos imported through the U.S.-Mexico-Canada Agreement, which Trump signed in his first term.
This latest announcement will apply to the vast majority of goods coming from the two countries.
Automotive Industry’s Tariff Exemption
To qualify for tariff-free border crossings under USMCA, a vehicle must contain a certain percentage of parts that were made in North America, or face a 2.5% tax.
The exemption applies not only to Detroit-based automakers, but to any cars from Canada and Mexico that comply with the trade deal, an administration official told The Wall Street Journal.
The WSJ also reported that the president is open to additional tariff exemptions such as those he granted to carmakers.
HDT is working to determine the effect of this on heavy-duty truck production. The American Trucking Associations said the tariffs could make the price tag of a new truck jump by as much as $35,000.
Jed Mandel of the Truck and Engine Manufacturers Association on Thursday morning told HDT that because there are no official documents yet explaining the pause, he could not clarify the impact on trucking.
MARCH 3: Trump Says Canada, Mexico Tariffs Start Tomorrow
President Donald Trump said Monday, March 3, that new 25% tariffs on Canada and Mexico will start Tuesday morning, March 4. The new tariffs could affect trucking in areas such freight volume and the price of trucks and parts.
Unlike last month when there was a last-minute deal to extend the deadline, Trump said in remarks at the White House that there’s no chance of a last-minute deal to stop them.
On social media, President Trump said, “Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China. More than 100,000 people died last year due to the distribution of these dangerous and highly addictive POISONS…. We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled.”
Mexico and Canada, as well as China, had previously vowed to retaliate with their own tariffs on U.S. goods. And in fact Canada countered with a 25% tariff on an immediate CA$30 billion in U.S. goods, with another CA$125 billion in additional goods tariff planned to come in force 21 days later. Canada had also held off on those tariffs in February, but has implemented them as of March 4 as well.
The president has said the tariffs are meant to pressure Canada and Mexico to stop the flow of drugs and migrants into the U.S. But they could hurt businesses that depend on international supply chains and could mean higher prices and inflation.
Tariffs and the Economy
Businesses and investors have expressed concern about the effects of tariffs on the U.S. economy. Other countries don’t actually pay the tariffs; they are a fee paid by the companies importing the goods. Importers will pass costs on, likely resulting in more inflation.
The Conference Board nonpartisan think tank noted that together, goods from Canada, Mexico, and China make up 41% of U.S. imports. The tariffs will have a significant impact on U.S. grocery items, consumer packaging and building materials, automotive vehicles and parts, electronics, and manufacturing inputs including critical minerals.
As part of an interview with CBS, as reported by Fox Business, investor Warren Buffet called tariffs “an act of war, to some degree….Over time, they are a tax on goods. I mean, the Tooth Fairy doesn’t pay ’em!”
Simply the uncertainty itself has had an effect on businesses. The Trade Policy Uncertainty Index has skyrocketed.
In a Feb. 27 report, S&P Global Ratings said higher tariffs are a top concern for many U.S. corporations it works with.
“We believe increasingly protectionist trade policies, including materially higher tariffs, would likely result in inflationary pressures through higher prices for consumers and rising input costs for U.S. sectors exposed to imports and cross-border supply chains at a time when they are grappling with already-elevated costs and a more difficult passthrough environment,” said David Tesher, S&P Global Ratings’ head of North America Credit Research.
S&P Global Ratings said the tariffs announced by the Trump administration so far on China, Mexico, Canada, and steel and aluminum will likely affect sectors such as autos, metals and mining, oil and gas, chemicals, retail, pharma and health care.
The National Retail Federation released a statement from Executive Vice President of Government Relations David French:
“The decision to impose tariffs on our North American neighbors and two of our largest trading partners is a significant measure. Unfortunately, it is one that will only hurt hardworking Americans and the businesses that strive to provide customers with the products they want and need on a daily basis.
“Tariffs are just one tool at the administration’s disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals. As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods.
“We urge the Trump administration and our Canadian and Mexican counterparts to work together to quickly resolve our outstanding border security issues.”
A tariff war risks plunging the world economy into a crash similar to the Great Depression of the 1930s, warned a senior official at the International Chamber of Commerce, which promotes global business and trade, reports the Wall Street Journal.
ATA: Beware Unintended Consequences of Tariffs
The American Trucking Associations released a statement supporting efforts to battle fentanyl and illegal immigration, but said the tariffs could lead to unintended consequences in the form of high prices for goods and groceries.
“With the success of USMCA and the growing trend of nearshoring, the North American supply chain has become highly integrated and supports millions of jobs,” said ATA President & CEO Chris Spear.
“Imposing border taxes on our two largest and most important trading partners will undo this progress and raise costs for consumers.
“The 100,000 full-time hardworking truckers hauling 85% of the surface trade in goods with Mexico and 67% of the goods traded with Canada will bear a direct and disproportionate impact. Not only will tariffs reduce cross-border freight, but they will also increase operational costs.
“The price tag of a new truck could rise by up to $35,000, amounting to a $2 billion annual tax and putting new equipment out of reach for small carriers.”
Long-Term Impact of Tariffs on Trucking Unclear
“With the Trump administration now in place, the trucking industry is eager to move forward, but the landscape is still changing – almost daily!” said Tom Perrone, SVP of Global Professional Services at project44, in an email to HDT.
“What is unclear is the long-term plan for these tariffs and the impact they will have if they persist for an extended time,” he added. “Now is the time to invest in agility and reassure customers that you are ready to respond in real-time to any potential disruptions.”
He recommended planning for multiple possible scenarios with tariffs, predicting that the imposition of taxes and tariffs will incur immediate legal challenges and further delays.
“Additionally, the bi-lateral tightening of border security could have downstream impacts on over-the-road transportation in North America,” Perrone said. “For example, a higher proportion of freight being searched on both sides of the Mexican and Canadian borders could slow the flow of goods and increase transit time.”
Higher Truck Prices
The tariffs will affect trucking imports and exports as well as manufacturing, pricing, profitability and volume, S&P Global Mobility predicted last month.
More than 40% of Class 8 trucks sold in the U.S. are imported from Canada and Mexico, it said.
“Commercial vehicle suppliers in the United States have little or no ability to absorb 25% cost increases imposed on goods from Canada and Mexico, and OEMs are only in a slightly better position,” it said “Moreover, some parts and systems may cross the borders multiple times during the production process.”
S&P Global Mobility estimates that the net impact of tariffs on new U.S. medium- and heavy-duty truck prices could be around 9%.
In a March 4 release, S&P said it sees a 70% probability for a quick resolution, with tariffs in effect only for up to a couple of weeks. In that case, it said there will be some vehicle production lost due to supply issues and border gridlock, and short-term OEM production halts.
It sees a 20% potential for extended disruption. If the tariffs are held in place for a six-to-eight-week duration, they said, it would take a year for the automotive industry to bounce back.
MEMA, The Vehicle Suppliers Association, which also includes heavy-duty trucking suppliers, said in a March 5 statement that the tariffs “have raised profound concerns across the sector placing additional pressure on the already-fragile supplier industry and its ability to operate absorb the costs, businesses, grow and invest.”
A recent MEMA survey found that 82% of suppliers say tariffs on goods from Mexico will have a negative impact on their business, and 68% say tariffs on goods from Canada will harm operations. Suppliers say the tariffs may result in actions such as cutting or delaying investments, modifying supply chains, cutting U.S. jobs, and even shifting production outside of the U.S., especially if they drag on for six months or more.
More Tariffs on the Way
More tariffs loom on the horizon. Trump has said he will implement “reciprocal tariffs,” expected to be announced in early April.
The Wall Street Journal reported on Feb. 27 that in reality, the government can’t flip the switch on those kinds of tariffs overnight. Administration officials told WSJ that it could take up to six months or even more, because it takes time to analyze the tariffs and nontrade barriers of all the nations affected.
Effective March 12, imports of steel and aluminum will be subject to a 25% tariff rate, according to a Trump announcement last month. This is an increase from the previous 10% tariff on aluminum.
The Auto Care Association said these increased tariffs would “have far-reaching consequences beyond the steel and aluminum industries,” said Bill Hanvey, president and CEO, Auto Care Association.
“Vehicle parts, along with countless other downstream industries, depend on a stable supply of raw material to create and provide the countless vehicles parts that keep our families, businesses and economy running,” he said.
“Many specialty steel products used in our industry are not readily available from domestic sources, making access to global supply chains essential.”
February 11: New Steel, Aluminum Tariffs Add to Concerns About Inflation
As President Donald Trump announced tougher tariffs on steel and aluminum imports than he put in place in 2018 during his first term, critics said they could lead to higher inflation.
While the 2018 tariffs on steel had some exceptions and exemptions, the new orders remove those. All steel imports will be taxed at a minimum of 25%. Trump also ordered 25% tariffs on aluminum imports, compared to 10% in 2018.
Canada, the largest source of steel imports, was quick to criticize the new tariffs. And the European Union vowed to take retaliatory action and likely will target motorcycles, jeans, peanut butter, bourbon, whiskey, and other U.S. exports to Europe.
While the president said tariffs will help level the playing field and make U.S. factories more competitive, those tariffs also mean a risk of higher inflation.
While U.S. companies may benefit from the tariffs and be able to charge higher prices, that means higher prices are also likely for anything made with steel and aluminum – such as heavy-duty trucks, components, and truck parts.
How Tariffs Could Make Inflation Worse
Looking Back: Trump’s 2018 Trade War
In 2018, Martin Daum, then head of Daimler Truck & Bus, criticized tariffs, pointing out how globally connected business and commerce and manufacturing are today.
Manufacturing companies such as Daimler, he said, don’t think in terms of national borders anymore.
“As more barriers and tariffs [are imposed], the more cumbersome our life is. We can work around it, but it’s the customers and ultimately the citizens of those countries who suffer, because they have to pay more.
“When I look around the globe, the more tariffs you build up, the more expensive life inside the country gets.”
The theory behind Trump’s tariffs is that they would create jobs as U.S. companies expand domestic production. But if higher prices result in lower sales, companies could end up cutting jobs instead.
Consumers already are expressing higher expectations for inflation.
Inflation expectations for the year ahead increased to 4.3 percent in February from 3.3 percent in January, according to the University of Michigan consumer sentiment survey released Feb. 7.
U.S. consumer sentiment dropped unexpectedly in February to a seven-month low and inflation expectations rose.
“Consumer sentiment fell for the second straight month, dropping about 5% to reach its lowest reading since July 2024, said Surveys of Consumers Director Joanne Hsu in a statement.
“The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups.
“Furthermore, all five index components deteriorated this month, led by a 12% slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy.”
Year-ahead inflation expectations in the survey jumped up from 3.3% last month to 4.3% this month, the highest reading since November 2023, marking two consecutive months of unusually large increases.
“This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations,” Hsu said.
Importers Try to Get Ahead of Tariffs
Meanwhile, import levels at the nation’s major container ports are expected to remain high as retailers continue to bring in cargo ahead of the 10% tariffs on China and other potential import tariffs.
Supply chains are complex, explained Jonathan Gold of the National Retail Foundation in a statement about the Global Port Tracker report released Feb. 7 by the NRF and Hackett Associates (before Trump’s announcement of steel and aluminum tariffs).
Gold, NRF Vice President for Supply Chain and Customs Policy, said, “Retailers continue to engage in diversification efforts. Unfortunately, it takes significant time to move supply chains, even if you can find available capacity.”
New tariffs on China and other countries will mean higher prices for American families, Gold said.
“Retailers have engaged in mitigation strategies to minimize the potential impact of tariffs, including frontloading of some products, but that can lead to increased challenges because of added warehousing and related costs. … there will be a significant impact on the economy if increased tariffs are maintained and expanded.”
Retailers have been frontloading imports of key products for several months because of the potential for the East Coast/Gulf Coast port strike in January as well as to get ahead of potential tariffs from President Donald Trump.
Port cargo (and therefore the drayage truckers serving the ports) “could be badly hit” if tariffs on overseas Asian and European nations increase prices and prompt consumers to buy less, Gold said.
“At this stage, the situation is fluid, and it’s too early to know if the tariffs will be implemented, removed or further delayed,” Hackett said.
Feb 6 Update: Trump Tariffs Spark Global Logistics Uncertainty
Just as the trucking industry was looking forward to what most economic experts predicted would be a moderately improving freight environment for 2025, on Monday, Feb. 3, there were fears that new tariffs announced by President Trump could put that in jeopardy.
But a reprieve came in the form of last-minute delays of 30 days for both Canada and Mexico tariffs as the countries continue to negotiate.
Meanwhile, Trump’s move to raise tariffs on Chinese goods by 10% was not put on pause. China retaliated with more tariffs on U.S. goods and anti-monopoly probes of Google and possibly Apple, among other things.
China lodged a complaint with the World Trade Organization that accusing the U.S. US of making “unfounded and false allegations” about its role in the fentanyl trade.
What Happened With The Tariff Whiplash
Over the first weekend of February, the Trump administration announced that starting Tuesday, Feb. 4, it would impose a 25% tariff on imports from Canada and Mexico. The administration also announced a 10% tariff on energy products from Canada and an additional 10% tariff on China.
However, by Monday afternoon, there were questions about whether those tariffs would become a reality, as President Trump pushed the pause button on Canada and Mexico tariffs for one month to allow for more negotiations.
The initial announcement of tariffs from the administration also said that if other countries retaliate with their own tariffs, which the leaders of Canada and Mexico over the weekend said they would, the administration said it would increase the tariffs.
Trade War, or War on Drugs?
Administration officials insisted that this is not a trade war, but a war on drugs.
The pause on the tariffs happened after the leaders of both countries agreed to send thousands of troops to the border and take other measures to help fight drug trafficking. However, published reports indicate that Canada and Mexico already had many of those measures already in place under the Biden administration.
According to published reports, ahead of a Monday afternoon call with Canada Prime Minister Justin Trudeau, President Trump said the United States did not need Canada to make cars or supply it with lumber, repeating earlier comments that he’d like to see Canada become the 51st U.S. state.
However, the call apparently went well. Canada agreed to put 10,000 frontline personnel on the border, will appoint a fentanyl czar, list cartels as terrorists, and launch a Canada-U.S. Joint Strike Force to address organized crime, fentanyl, and money laundering.
Trump said the pause was implemented “to see whether or not a final Economic deal with Canada can be structured.”
All the uncertainty about tariffs means the phones have been ringing off the hook at customs brokers, reports the Wall Street Journal, with “panicked clients” worried about the cost of the tariffs and asking about how to avoid them.
What Would A New Trump Trade War Mean for Trucking?
A pause on implementation of the tariffs doesn’t necessarily mean the threat to the economy is over.
Economic experts have said a trade war could be triggered by the tariffs as originally announced and would likely hurt the U.S. economy and increase inflation.
“As the trucking industry recovers from a years-long freight recession marked by low freight volumes, depressed rates, and rising operational costs, we have concern that tariffs could decrease freight volumes and increase costs for motor carriers at a time when the industry is just beginning to recover,” said American Trucking Associations President & CEO Chris Spear in a statement after the tariffs were first announced.
While trucking supports efforts to fight drug and human trafficking, Spear said, unintended consequences that substantial tariffs could have over the long-term include higher consumer costs on the wide range of goods that cross our borders by truck, including food, automobiles, televisions, computers, furniture, and other key manufacturing inputs.
Immediate Impact of Tariffs vs. Longer-Term Tariff Burden
According to supply chain data from Motive’s Q1 Economic Report, we saw record trade with Mexico in the most recent quarter. Canadian truck crossings dipped almost 5% year over year and were relatively flat compared to prior years. Truck crossings from Mexico increased by 19.3%, while Canada declined 4.7%.
“The immediate impact of tariffs on trucking, freight, and supply chains will be muted,” said Hamish Woodrow, head of strategic analytics at Motive, who authored the report.
“Goods already en route, shipments six weeks out on the water, and landed inventory will continue to flow, meaning the real disruption will be felt in Q2 as businesses adjust to the new reality.”
“Ultimately, the burden of these tariffs will fall on U.S. consumers and retailers. Prices will rise, and businesses will pass along costs as they navigate increased expenses and uncertainty,” Woodrow said.
“Mexico’s role as the dominant trade partner will remain strong. Our data showed trade through the Laredo port is up nearly 30% year-over-year, and October 2024 set a record 677,000 truck crossings. But any prolonged disruption could reshape regional supply chains in ways that will be felt for years to come.”
In a statement, the Private Motor Truck Council of Canada warned that “the unjustified tariffs being imposed on Canada by U.S. President Trump will have severe consequences on both the Canadian and U.S. economies” and will mean a slowdown in cross border trade, said PMTC President Mike Millian, affecting cross-border trucking.
Tariffs Could Mean More Expensive Heavy-Duty Trucks
A 25% tariff levied on Mexico could see the price of a new Class 8 tractor increase by as much as $35,000, Spear said.
“That is cost-prohibitive for many small carriers, and for larger fleets, it would add tens of millions of dollars in annual operating costs.”
Truck makers assemble a number of heavy-duty truck models in Mexico, including Freightliner in Saltillo; International in Escobedo and Santiago; and Peterbilt in Mexicali.
“Tariffs would upend the past three decades of the auto industry using free-trade rules and knitting together a vast factory web across the U.S., Mexico and Canada.”
Because many parts and components are manufactured in Mexico and Canada, costs also will increase for the manufacture of trucks in the U.S.
As a Wall Street Journal article said about the potential effects of steep Canadian and Mexican tariffs on the automotive industry, “Tariffs would upend the past three decades of the auto industry using free-trade rules and knitting together a vast factory web across the U.S., Mexico and Canada.”
While the article was about auto makers, the same holds true in many cases for truck manufacturing and other types of manufacturing as well.
The National Association of Manufacturers pointed out that thanks to the United States-Mexico-Canada Agreement signed in Trump’s first administration, one third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China.
“A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally,” said NAM President and CEO Jay Timmons in a statement.
“The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs.”
More Details About Trump’s Proposed Tariffs
Tariffs and trade wars were also a part of Trump’s first term as president.
The new tariffs are being imposed under a never-before-used emergency economic authority, “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” Trump posted on his Truth Social platform.
“Despite the US administration claims, this tariff policy has zero to do with border controls.”
PMTC President Mike Millian took exception to that: “Despite the US administration claims, this tariff policy has zero to do with border controls,” he said in a statement.
“Less than 1% of fentanyl and illegal migrant crossings into the U.S. come from Canada. The facts simply do not support the claims. We hope common sense will prevail and these tariffs will be short lived.”
In addition, fentanyl overdose deaths already have been coming down from the highs they reached during the COVID-19 pandemic. There were just under 90,000 U.S. overdose deaths in the 12 months ended in August, down nearly 22% from the previous 12-month period, according to the Centers for Disease Control and Prevention.
According to the published reports, President Trump said more tariffs are coming on products such as computer chips, pharmaceuticals, steel, aluminum, copper, oil and gas imports, possibly as soon as this month. He wants to impose tariffs on the European Union, as well.
- Originally published at 10:57 a.m. EST on February 3.
- Updated 3:30 pm EST Feb. 3 to add comments from Motive.
- Updated 4:15 p.m. EST Feb. 3 to include the pause on tariffs with Mexico.
- Updated 6:05 p.m. EST Feb. 3 to add the pause on tariffs with Canada
- Updated 10:00 a.m. EST Feb. 6 to add information about China tariffs and customs broker impact.
- Updated 1:45 EST Feb. 11 to add latest on steel and aluminum tariffs.
- Updated 4:50 EST March 3 to add news about Canada and Mexico tariffs going into effect.
- Updated March 4 to add statement from American Trucking Associations, information on Canada’s retaliatory tariffs, comment from S&P Global Mobility
- Updated March 5 to add comments from MEMA and the World Chamber of Commerce.
- Updated March 6 to add information about the one-month pause on automotive tariffs and on products meeting USMCA requirement.
- Updated March 27 to add news about automotive tariffs and impacts of steel and aluminum tariffs.
- Updated April 8-9 as Trump backed off some tariffs.
- Updated April 15 to add information about potential tariffs on pharmaceuticals and chips.
- Updated April 24 to add news about truck import investigation
- Updated May 12 to add news about the U.S.-China tariff agreement.
