It’s been decades in the making, and President Trump finally got his big tariff dream to materialize. And the world has taken notice. A full-scale trade war with China might be on the horizon, but the president believes the tariff move has succeeded as he pauses retaliatory tariffs on all countries except China, which has been hit with tariffs totaling 145% (for now).
But experts are not so sure of the tariffs’ success. There are a lot of mixed reactions, and it remains to be seen how the tariff situation will unfold in the long term. However, one thing is certain: There is a lot of panic and uncertainty in the short term.
We have compiled some trending news and insights highlighting tariffs’ impact on freight. Continue reading to stay up to date.
Tariff Uncertainty Drags Down US Truckload Pricing
After a brief uptick in the first quarter, truckload pricing is returning to lower levels, with forecasts showing the truckload index dropping from 5.9% to 5.5% in the second quarter. Data from AFS Logistics and TD Cowen indicates that soft freight demand and persistent economic uncertainty, fueled by recent tariffs on Mexican, Canadian, steel, aluminum, and automotive imports, are weighing on prices.
While the truckload spot market has seen slight gains from pre-tariff shifts in freight, longer-term indicators, such as the truckload producer price index and overall linehaul costs, remain near recent lows. The less-than-truckload market shows a modest rise compared to a year ago. However, LTL is also expected to feel the pressure of these market conditions.
Trade Tariff Upheaval Forces Freight Market Shifts
The Trump administration’s trade policies have significantly altered international commerce and influenced freight operations. Tariffs applied broadly to imports from China and other trading partners are increasing costs for U.S. importers and forcing supply chain players to adjust their strategies.
Supply chain analyst Judah Levine explained that the wide-ranging tariffs have set the stage for slower GDP growth and lower global trade volumes. In the ocean freight sector, importers have front-loaded cargo to beat tariff deadlines. However, this has created the expectation of a drop in container volumes and reduced demand once inventories are cleared.
Meanwhile, shifts in the air cargo market include Chinese e-commerce companies exploring manufacturing moves to countries such as Vietnam and adjusting capacity allocation and pricing. These developments point to a more uncertain future for both ocean and air freight markets, with businesses needing to remain alert and flexible.
Trade War Turmoil Squeezes US Consumers and Shifts Spending Patterns
The Trump administration’s tariffs are expected to push up prices on products from apparel and electronics to furniture and food. The high costs that could lead to increased debt, consumer concerns, and recent extreme weather have confused many Americans about how to prioritize their spending.
Recent research indicates that the latest tariff hike will add roughly 1.8 percentage points to personal consumption inflation, with overall economic activity at risk of stalling and possibly falling into recession. The National Retail Federation forecasts slower growth in retail sales, while off-price retailers have noted that Hispanic consumer demand is underperforming compared to non-Hispanic demand.
Carriers to Seek Compensation from Automakers as Tariffs Disrupt Vehicle Imports
Following the imposition of a 25% tariff on all U.S. vehicle imports starting April 2 and the tariffs on components scheduled for May 3, global car carrier operators may look to vehicle manufacturers for compensation to cover potential drops in shipping volumes. However, contract clauses allow carriers to claim payments if the agreed shipment volumes are not met.
Industry leaders such as Wallenius Wilhelmsen emphasize flexibility in adjusting to changes, noting that if automakers postpone shipments or reroute vehicles, they are open to discussing alternatives under existing contracts. The tariffs have led to significant disruptions, with some automakers pausing shipments and stockpiling vehicles at U.S. ports. They are expected to have a lasting impact on the global automotive trade.
Global Carbon Tax on Shipping Faces Pushback Over Rising Consumer Costs
Representatives are set to finalize a global carbon tax on ocean shipping emissions during a meeting in London. The initiative, driven by the International Maritime Organization and based on a 2023 agreement aiming for net-zero shipping emissions by 2050, targets vessels engaged in container shipping, crude oil transport, and other cargo operations.
Proponents believe that introducing penalties, as well as the new standards for green fuels, will help close the cost gap between fossil fuels and alternatives like ammonia, hydrogen, and methanol. Opponents argue that the increased operating costs will be transferred to shippers and eventually to U.S. consumers through higher prices on goods.
The proposal has drawn mixed support from countries, with some advocating for a flat emission levy and others favoring a cap-and-trade system.
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