By Maggie Johnson
January 22, 2025
In early 2024, logistics experts anticipated potential tariff changes under a Trump administration, prompting discussions around front-loading strategies. While tariffs imposed via Sections 232 and 301 are familiar, new tariffs under the International Economic Emergency Powers Act (IEEPA) could have a far more disruptive impact.
“These tariffs could be swift and expansive,” said Safiya Ghori-Ahmad, Senior Director at APCO. “It's unclear whether they'll target specific countries, industries, or both, but the effects on global companies and shippers could be immediate—raising costs and dampening demand for imports.”
Ghori-Ahmad warns importers that goods currently in transit or arriving at US ports may be subject to sudden tariffs, creating unexpected expenses for companies locked into contracts that prevent cost-sharing with customers. Ocean freight rates also hint at increased front-loading activity, with shippers bracing for immediate cost spikes. “Consumers need to understand how tariffs will affect everything—from car components to household groceries,” she added.
Josh Teitelbaum, senior counsel at Akin, emphasized the rapid timeline for tariff implementation under IEEPA. “A national emergency declaration followed by an executive order could result in tariffs within days,” he said. This dual-step process includes setting new rates in Customs systems swiftly, leaving little room for adjustment.
Teitelbaum, with experience in US trade policy, highlighted that the scope of these tariffs may extend beyond China to include key trading partners like Mexico and Canada. While such threats have historically served as negotiating tools, their implementation could still be significant, particularly for smaller businesses lacking the resources of large corporations.
“Small- to medium-sized companies face the greatest challenges,” Teitelbaum noted. Without economies of scale to absorb costs, these businesses may resort to renegotiating contracts or cutting future expenses. However, clients can refuse to share the burden, forcing companies to absorb the tariffs outright.
Contrary to claims that "China pays the tariffs," Customs records confirm the financial responsibility falls on the importer. Manufacturing relocation, which Trump cites as a result of tariffs, remains limited. For instance, COVID-19 disruptions highlighted China’s dominance, as Vietnam’s factories struggled to reopen without executives and workers stuck in China.
If emergency tariffs are enacted, their impact could be far-reaching, testing the resilience of US shippers and global trade networks alike.
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