The domestic shipping industry could soon see the U.S. and China’s Tariff cuts affecting trucking. On May 12, the countries agreed to reduce taxes for 90 days. The U.S. lowered tariffs on Chinese imports from 145% to 30%, while China reduced theirs from 125% to 10%. The reason behind the tariffs is an ongoing trade war between the two countries. Trump believes that China has had unfair trading practices and allowed for the inflow of drugs to the U.S. While the tariffs would significantly affect international shipping, they would also affect moving goods domestically.
What Would Have Been the Impact of Tariffs on Trucking?
Regarding volume, China and the U.S. are the largest exporters and importers globally. Due to their size, higher tariffs would have negatively impacted countless supply chains that require trucking. Trucking is a common component for domestic and international supply chains for exporting or importing to the U.S. An example is drayage services, which transport goods over short distances, including from the port to the final destination. Drayage can also include moving cargo from your facility to the port before shipping internationally. Tariffs could have raised the cost of importing containers to the U.S., causing truckers to increase their fees to compensate. Trucking companies that cannot increase costs could have feared potential bankruptcy.
Another goal of the tariffs was to bring manufacturing was to bring manufacturing back to the U.S. Many believe that an increase in tariffs could have benefited trucking due to a rise in insourcing. Increased products manufactured domestically would result in a greater need to move them to the final destination by truck. In turn, this may have resulted in higher profits for truckers and more carrier companies entering the industry. Despite the benefits, analysts believe that higher tariffs would negatively impact trucking due to economic inflation. The higher cost would result in carriers raising costs to compensate, which could fall on the customer.
How Are The U.S. and China’s Tariff Cuts Affecting Trucking?
Immediately after Trump announced a 90-day tariff reduction, imports from China to the U.S. surged. As a result, trucking companies experienced a boost in freight volumes, particularly in the Port of Los Angeles. Despite the surge, the trucking industry could still feel the strain from the 30% tariff remaining. The 10% reciprocal tariff also remains for all countries importing to the U.S. Layoffs are still possible, with costs to ship domestically still being high. Truckers are already looking for ways to manage the current cost increase, such as reducing their reliance on goods from other countries.
When moving goods domestically, you must be aware of anything that can affect your shipment’s success. Disruption can result in delays, monetary loss, and loss of cargo. Disturbances can be especially adverse if you’re a business with customers expecting products. An ideal way to begin is by contacting a freight broker. Brokers are the middlemen between carriers and shippers who must transport goods domestically. They do this by being in contact with a network of carriers that can move your goods by truck. Brokers also have other services, like finding rates, providing documentation, and consulting to find the best solution for your shipment. Contact A1 Freight Solutions at info@a1fsinc.com or 786-375-9420 to begin shipping domestically.