An executive order signed by the Trump administration has led to President Trump announcing import tariffs last week. Starting April 5th, all importations into the U.S. from different countries will face a 10% tariff. Likewise, country-specific levies will begin on April 9th. These differ from the 25% tariffs Trump announced earlier this year for Canada and Mexico. Foreign countries have already responded by announcing their tariffs, such as China enforcing 34% taxes on all U.S. goods. While the tariffs will significantly impact international shipping, they will also affect the movement of goods domestically. Supply chains that require trucking in the U.S. have already begun feeling the impacts of a trade war.
Why Is Trump Announcing Import Tariffs?
The main goal behind announcing reciprocal tariffs is to address unfair trade practices from other countries. Trump recently stated, “We’ve been ripped off for years, and we’re not going to be ripped off anymore.” The belief is that other countries impose higher tariffs on U.S. goods, and Trump wants to level the playing field. He noted a $1.2 trillion trade defect from the U.S. from last year and other trading partners. Another goal is to bring manufacturing and businesses back to the U.S. to stimulate the economy and create jobs. Economists believe that the tariffs will have a reverse effect and hurt the economy by creating inflation.
How Will Domestic Shipping Be Impacted By Trump Announcing Import Tariffs?
Despite Trump placing tariffs on international goods, they could negatively and positively affect domestic shipping. Importers that bring goods into the U.S. tend to have supply chains that use multiple conveyance methods, including trucking. For example, they use drayage services to get the goods from a port. The tariffs could hurt domestic shipping by raising supply chain costs for importing. The higher expenses will fall on trucking that picks up the cargo arriving in the U.S. and potentially increasing rates. There is a fear that higher costs will result in trucking companies filing for bankruptcy due to expenses.
The tariffs could also have a positive effect and benefit the trucking industry. One of the primary purposes behind the tariff is to bring manufacturing back to the U.S. As more companies begin producing goods domestically, there could be a higher demand for moving them to the final destination. In turn, more carrier companies could enter the market to meet the demand. A higher volume of shipments may result in higher profits for truckers due to more business. Companies that outsource from different countries could also rush to import goods before April 9th, raising the volume.
A1 Freight Solutions
As tariffs begin on U.S. imports, you must protect your shipment. As mentioned, taxes on imported goods are felt throughout the supply chain and can impact domestic shipping. Whether it positively or negatively affects the trucking industry should not affect your cargo’s movement. However, you should take the proper steps to avoid disruptions. An ideal step when starting is talking to a freight broker. Brokers are the middleman between shippers and carriers and coordinate a shipment’s movement on behalf of the shipper. They provide solutions like rate negotiation, documentation, and finding truckers. Contact A1 Freight Solutions at 786-375-9420 or info@a1fsinc.com to talk to a broker regarding moving your cargo anywhere domestically.