Tariff Announcements and Policy Changes
Early last week, President Trump introduced a 25% tariff on all U.S. imports from Mexico and Canada. However, within a day, a
one-month reprieve was granted for automotive goods covered under the USMCA. By Thursday, this suspension was extended to all imports under the USMCA.
Approximately 50% of Canadian imports and 38% of Mexican imports fall under the USMCA, covering key goods like automobiles, agricultural products, appliances, and electronics. Despite this, about $1 billion in daily imports remain outside the USMCA, now subject to the 25% tariff hike. These affected goods include phones, computers, and medical equipment.
Trade Policy Deadlines & Upcoming Tariff Decisions
President Donald Trump has
dropped his plan to raise tariffs on Canadian steel and aluminum imports to 50%, according to White House trade advisor Peter Navarro. The announcement came Tuesday afternoon, just hours after Trump initially stated he would double the import duties. His decision was in response to Ontario’s move to impose a 25% tax on electricity exports to the U.S.
Ontario Premier Doug Ford later announced he was pausing the surcharge after discussions with U.S. Commerce Secretary Howard Lutnick. This reversal likely influenced Trump’s decision to halt the tariff increase, easing tensions between the two countries.
Other trade developments include concerns over China's presence in the
Panama Canal, which contributed to the
sale of Hutchison Ports. Additionally, the USTR's proposed port call fee on Chinese-made vessels has already led CMA CGM to pledge a $20 billion investment in U.S. infrastructure, including
shipbuilding. In February, the United States Trade Representative (USTR), which was tasked with investigating the issue,
proposed a $1 million fee for any Chinese-made ship docking at a US port
Several critical deadlines for new tariffs and trade policies are approaching:
- March 24 – USTR hearing on the proposed port call fees for Chinese-made vessels.
- April 1 – Release of trade policy reports under the America First Trade Policy memo, which includes Trump’s proposed 60% tariff on Chinese goods.
- April 2 – Deadline for the potential 25% tariffs on USMCA goods.
These uncertainties make long-term planning difficult for shippers, with
many adopting a wait-and-see approach before making significant supply chain investments.
Market Response & Supply Chain Disruptions
Global Trade & Ocean Freight Market Trends
Amid tariff uncertainties, U.S. importers have been frontloading shipments since November, boosting ocean demand and freight rates. The National Retail Federation’s latest report indicates that U.S. ocean import volumes from November through February were 12% higher than the previous year. Volumes are projected to remain strong through May but are expected to weaken in June and July due to early shipments.
Transpacific container rates have declined post-Lunar New Year:
- Asia-U.S. West Coast (FBX01 Weekly) –
Fell 25% to
$2,659/FEU.
- Asia-U.S. East Coast (FBX03 Weekly) – Fell 16% to
$3,754/FEU.
- Asia-North Europe (FBX11 Weekly) – Increased 3% to
$3,064/FEU.
- Asia-Mediterranean (FBX13 Weekly) – Remained stable at
$4,159/FEU.
A recent reshuffle in carrier alliances has increased competition and affected capacity management, further contributing to rate fluctuations. While transatlantic rates have remained stable,
some carriers have announced April General Rate Increases (GRIs). However, Red Sea diversions continue to keep prices at nearly double the long-term average.
With ongoing tariff changes and market fluctuations, staying updated is more important than ever.
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