The application of The U.S. tariff policy has been, to say the least, confusing, between the relentless threats from Donald Trump and his subsequent reversals and delays. Last week, The U.S. administration initially announced that imports of automobiles from Canada and Mexico would be exempt from the 25% tariff for one month, after executives from Ford, General Motors, and Stellantis raised concerns about the economic impact of the measure. Later, Trump signed executive actions that delayed the imposition of tariffs on products from Mexico and Canada covered by the USMCA (the free trade agreement between the three North American countries) until April 2, following negotiations with Mexican President Claudia Sheinbaum and Canadian officials.
The U.S. administration has been more firm on its tariff policy regarding Chinese imports, confirming the imposition of an additional 10% tariff, bringing the total tariff burden on China to 20%.
These new tariffs are in addition to those imposed on China in 2018, when Donald Trump’s first administration applied a 25% tariff on Chinese goods valued at hundreds of billions of dollars. Since then, these tariffs have largely remained in place, despite the signing of the “Phase One” trade agreement in 2020, which reduced some restrictions but did not eliminate the main ones. Now, with the addition of new tariffs, the trade pressure between The U.S. and China is once again intensifying.
However, it should not be forgotten that during his election campaign, Trump proposed raising tariffs on imports by as much as 60%, which could possibly go into effect as soon as April.
Consequences of the Tariffs
Products from China, Mexico, and Canada accounted for around 40% of The U.S. total imports by value in 2024. According to Judah Levine, Chief Analyst at Freightos, this matter was extensively discussed at the TPM 25 conference held in Long Beach, where representatives from shipping lines, importers, and freight forwarders concluded that, although these trade barriers will drive greater diversification of The U.S. sourcing partners, the measures will primarily result in higher costs for importers and likely higher prices for consumers. If applied, the tariffs will also harm The U.S. exporters, as China has announced retaliatory actions, which could also be implemented by Mexico and Canada if the tariffs are finally imposed in April.
Many importers have been preemptively bringing in shipments from China since The U.S. presidential election in anticipation of the tariff increases. Now, with the expected application of the final tariffs in April, the window for importing goods before that date is nearly closed, which seems to be enough of an incentive for The U.S. imports from China to start slowing down.
Consequences of Tariffs on Vessels
Another announcement that has shaken the maritime industry in recent days was the proposal by the Office of the United States Trade Representative (USTR) to impose tariffs on vessel arrivals in The U.S. for ships manufactured in China. These tariffs could go into effect as early as April, and may be a factor putting upward pressure on freight rates to The U.S.
Regarding this, MSC’s CEO, Soren Toft, warned during his presentation at TPM 25 that the proposed tariffs for each vessel arrival at The U.S. ports will not only result in hundreds of dollars per FEU in costs transferred to cargo owners, but could also make transatlantic routes serviced by smaller vessels economically unviable. Additionally, it will encourage shipping lines to skip calls at smaller ports, leading to lower volumes at these ports, potential congestion, and delays as more containers pile up at the main hubs.
Exemption of “Minimis”
Among the list of tariffs, one that has remained in place is the one applied to the “minimis” threshold (the minimum value below which imported goods are exempt from tariffs and taxes) for Chinese products. Previously, the “minimis” threshold allowed the importation of goods valued under $800 to be exempt from tariffs and taxes. On February 1st, 2025, President Trump signed an executive order eliminating the “minimis” exemption for products from China, meaning that all Chinese imports, regardless of value, would be subject to tariffs and taxes.
This measure has significantly impacted Chinese e-commerce companies, such as Shein and Temu, which benefited from the exemption by sending low-cost products to The U.S. consumers.
Additionally, this measure is already leading to reports of canceled charter flights. The Freightos air freight index rates between China and the The U.S. have dropped to less than $5.00/kg compared to $6.00/kg a year ago, suggesting a slight decrease in demand. However, this level remains significantly high compared to the long-term average, indicating that a large drop in volumes or capacity release in the market has not yet materialized.
Source: MundoMarítimo
