After a recent announcement by the Trump Administration, shippers can soon see new tariffs affecting trucking. On July 7, President Trump announced an extension to the 90-day pause on the reciprocal levies starting July 9. They will begin on August 1 and have different amounts from the original rates. Some rates will increase, decrease, or stay the same based on the country. Trump also announced a 30% tariff on imports from Mexico and a 35% tax on Canadian imports. Canada and Mexico are responsible for most shipments brought into the US by cross-border trucking. While the tariffs will directly impact cross-border trucking, they will also affect domestic shipping.
President Trump has various goals in imposing tariffs, including leveling the playing field with US trading partners. He recently said, “We’ve been ripped off for years, and we’re not going to be ripped off anymore.” Trump is using the levies to pressure countries to make better trade deals. The deadline extended to August 1 will give trading partners time to renegotiate deals without immediate escalation. Another purpose behind the tariffs is to bring manufacturing back to the US to create jobs and stimulate the economy. Although there is a belief that it could benefit domestic shipping, economists believe that it could raise shipping costs.
How Shippers Could See Trump’s New Tariffs Affecting Trucking
Trucking is a primary component of supply chains for international and domestic shipping, meaning tariffs will have a direct impact. Immediately, shippers could see higher costs to bring goods into the US. Along with cross-border shipping by truck, shipments from overseas countries will also increase prices. This is due to drayage, which is the movement of cargo short distances, including from ports to other locations. Another effect is that shippers will reduce freight volumes for importing and exporting due to the higher costs. In turn, this will lower demand, which could tighten profit margins. Rising equipment costs from steel, aluminum, and electronics tariffs may also squeeze profit margins.
How Can You Protect Your Shipment?
Due to the impact that tariffs can have, it is increasingly essential to protect your shipment. Failure to prepare can lead to delays, cargo loss, and higher costs. For cross-border shippers, this can mean importing from different countries unaffected by the levies. This could mean bringing goods in from overseas countries that are less costly. Importers have also found other solutions, like breaking down shipments into smaller components to only pay for tariff-affected goods. Being up-to-date with tariffs and regulations affecting your shipment is also essential. Shippers can do this by constantly looking at news reports and reading articles.
Although tariffs may cause disruptions in shipping goods by truck, they should not stop cargo movement. However, you should take the proper steps to mitigate potential disturbances. Another way to protect your shipment is by speaking to a freight broker. Brokers act as the intermediary between shippers and carriers and coordinate freight transport on behalf of the shipper. They do this by offering various solutions like documentation, negotiating rates, finding carriers, etc. Brokers also find the best way to protect your goods during situations like higher tariffs. Reach A1 Freight Solutions at 786-375-9420 or info@a1wwl.com to discuss your shipment’s success with our brokers.