Industry Reactions to Trump’s Trade War with Key Partners

President Trump Vows Trade Tariffs on China, Canada, and Mexico

Nick Terry • January 28, 2025

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During his campaign, President Donald Trump made no secret of his intentions to bring manufacturing back to the U.S., including ending perceived trade disadvantages with key partners, including Canada, Mexico, and the European Union. The move has drawn mixed reactions from industry leaders and experts, but no one is certain how it will pan out.

In this newsletter, we review some of the potential tariff plans and how the market is reacting. Continue reading to find out more.

Trump’s Tariff Plans Target Major Trade Partners and Raise Economic Concerns

Imports moving into the U.S. from neighbors Canada and Mexico could soon be subjected to 25% tariffs as Trump follows through on his plans to impose duties on key markets, including countries aligned with America’s interests. Trump will also impose an additional 10% tariff on China-based imports starting Feb. 1. This aligns with commitments made during his reelection campaign and inauguration, with the timeline for implementation clarified during a recent White House press briefing. Trump has said the tariffs are tied to fentanyl imports from China into Mexico and Canada.

However, the move is part of a broader strategy outlined in a recent memorandum. The memorandum tasks federal agencies with reviewing U.S. trade policy and suggesting potential actions by April 1. The decision could strain U.S. trade relations, particularly with China, Canada, and Mexico, and may result in retaliatory tariffs and other economic impacts, including reduced consumer spending power and potential legal issues for U.S. businesses abroad.

Shippers Strategize Trucking Costs Amid Uncertain Freight Market

Trucking contract negotiations are underway, but shippers and carriers are trying to navigate the process to ensure long-term success. U.S. shippers are balancing the desire to limit rate increases with the need to maintain reliable carrier partnerships. Spot rates have shown a modest uptick, but contract rates have remained flat for the most part due to lingering excess capacity in the market. However, shippers are wary of pushing too hard for rate reductions, fearing a potential loss of capacity when demand rises later in 2025.

Industry experts suggest rate increases will be modest during this cycle, with many shippers prioritizing stability over short-term savings. Surveys indicate that 70% of shippers anticipate higher freight volumes, while 57% expect rate hikes this year. Some logistics managers are opting for moderate rate increases to maintain carrier relationships, particularly as tightening capacity is predicted to lead to higher costs in the second half of the year.

Conversely, carriers are under pressure to navigate these negotiations as they face increasing operational costs. While many shippers remain cautious, a shift in market conditions could see rates climb significantly by year’s end, potentially impacting the freight market’s recovery timeline.

Logistics Real Estate Primed for Growth Following US Election

Prologis, a major logistics real estate developer, anticipates an upswing in industrial rents later in 2025. This is driven by rising demand for leased space, including from third-party logistics providers. Following the presidential election, stalled decisions on new developments were unlocked, leading to a significant increase in leasing activity. Prologis set a record in the fourth quarter, leasing 60 million square feet of space.

The company reported an average occupancy rate of 95.8% in Q4 2024, with projections for stability of about 96% through 2025. While industrial rents declined slightly last year, Prologis expects them to bottom out and begin climbing later this year, fueled by inventory needs and steady absorption of logistics space. E-commerce, electronics, food and beverage, and 3PLs have been key demand drivers.

Prologis has $5 billion and 30 million square feet of projects underway and continues to see strong investor interest in logistics, data centers, and energy-related facilities.

Shipping Routes and Freight Rates Face Shift Amid Red Sea Developments

Earlier this month, following the Gaza ceasefire, the Houthi militants pledged to stop attacks in the Red Sea and limit their attacks to Israeli-affiliated vessels. However, despite these promises, ocean carriers remain cautious about resuming Red Sea transits.

Major carriers, including Hapag-Lloyd and Maersk, are calling for more secure waters and have reiterated their commitment to resuming Red Sea operations only when the area is deemed safe. The ongoing conflict, which began affecting shipping in late 2023, forced vessels to divert around the Cape of Good Hope, removing substantial capacity from the market. This shift led to higher freight rates as capacity tightened.

A return to Red Sea routes could significantly impact global shipping dynamics. Analysts predict falling spot rates and potential overcapacity challenges. Carriers have suggested increased scrapping and capacity management to address the risks. However, experts warn that the market may still experience turbulence, with rates likely to fall sharply before stabilizing.

US Considers Ending Duty-Free Rule for Certain Low-Value Imports

Prior to the end of the Biden administration, U.S. Customs and Border Protection (CBP) proposed changes to rules governing low-value imports, especially targeting goods subject to tariffs or national security restrictions. If the Trump administration implements the changes, it will end duty-free entry for products valued under $800, subject to Section 301 tariffs, including many Chinese imports like textiles, appliances, and steel.

The move could potentially increase consumer costs and dampen demand, although experts predict Chinese e-commerce firms will adapt swiftly through strategies like consolidating shipments or establishing fulfillment centers in North America. Under the current system, the de minimis exemption allows low-value imports to bypass duties and some reporting requirements. However, the CBP argues the exemption has been exploited, contributing to surging imports, counterfeit goods, and even fentanyl smuggling.

Proponents of the change, including U.S. textile groups, claim the loophole harms domestic industries by allowing subsidized foreign goods to undercut U.S. manufacturers. If finalized, the new rules could raise prices for certain low-cost imports by 20-35% and lengthen delivery times slightly. Consumers and businesses have 60 days to provide feedback on the proposal.

Tariff Threats on Canada and Mexico Pose Broad Trade Challenges for US Industries

President Trump’s threat to impose 25% tariffs on goods from Canada and Mexico has raised concerns across several key industries, including chemicals, energy, and transportation. While much attention has been focused on the auto sector, broader implications extend to essential goods like chlorine for water treatment, lumber, and critical minerals vital for electric vehicle production.

Canada is the top U.S. trade partner for chemicals, and billions of dollars of cross-border trade rely on railroads for transport. Analysts warn that tariffs could disrupt supply chains, inflate prices, and strain the close economic ties facilitated by agreements such as the USMCA. Meanwhile, shippers are preparing for the potential ripple effects, ranging from increased consumer costs to retaliatory tariffs.

Concerns are particularly acute in sectors like apparel, where tariffs could substantially increase the cost of goods like denim, and energy, with Canada being a key supplier of crude oil and natural gas. While trade policies are still under review, industries reliant on North American partnerships are bracing for significant challenges if tariffs are enacted.

China’s Dominance in Global Shipping and Shipbuilding Threatens US Competitiveness and Security

A recent U.S. investigation into China’s trade practices has revealed a concerted effort by the country to dominate the global ocean shipping and shipbuilding markets. While this is acceptable if done through the right channels, the investigation also revealed that the Chinese government is utilizing unfair tactics.

The probe, initiated in April 2024, highlighted that China’s market share in shipbuilding surged from less than 5% in 1999 to more than 50% by 2023. China also pushed its ownership of the commercial world fleet to over 19% as of January 2024.

According to the report, government policies that unfairly depress costs or provide advantages enabled the targeting. In a broader sense, the move has severely disadvantaged U.S. companies, workers, and the U.S. economy by lessening competition and commercial opportunities and creating economic security risks from dependencies and vulnerabilities.

Navigate the Freight Market with Entourage Freight Solutions

Entourage Freight Solutions has an extensive background and expertise in food service logistics. The company’s unique strategy, honed in the food supply chain, ensures an unmatched service level and extreme attention to detail in meeting all our shippers’ needs.

EFS platforms leverage the latest cloud-based, GPS-enabled technologies. They can track drivers regardless of location, continuously reroute shipments based on the dynamics at play, such as weather or traffic, and account for real-time changes in market rates. At Entourage Freight Solutions, we offer a broad range of unsurpassed services. These include:

1. Full Truck Load (FTL): For shipments requiring a dedicated whole truckload.

2. Less than truckload (LTL): For companies moving multiple LTL shipments to different locations or consolidating LTL goods from other companies to get a lower all-in rate.

3. Refrigerated Trucking or “Reefer” Transportation: Leveraged to avoid spoilage and damage to temperature-sensitive goods.

4. Cross-Docking: We have locations in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, which serve as cross-docks for strategic consolidation, storage, and end-to-end distribution programs.

Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.

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Tariffs, Trade Policy, and the Great Freight Fallout

By Nick Terry • April 28, 2025

In 2025, trade policy is no longer something that the freight industry can leave on the back burner. Trade policy today is shaping strategy at every level. From tariff escalations and retaliatory duties to sweeping regulatory changes and targeted maritime fees, supply chain leaders are navigating a freight market in which unpredictability is the only constant. Sourcing decisions are shifting, pricing dynamics are unstable, and long-standing operational models are being rewritten in real time. This edition brings together key stories highlighting the growing pressure across logistics channels. Each development points to an industry moving fast, and often reactively, to keep pace with volatile policy decisions. Tariffs Stall US Freight Recovery as Shippers Pause Orders The recent move by the U.S. Trade Representative (USTR) to impose entrance fees on Chinese-built ships calling U.S. ports has only added to the confusion and uncertainty gripping global supply chains and freight operations. Shippers are pausing plans and slashing orders, with truckload volumes, containerized imports, and manufacturing output all showing signs of contraction. Ocean freight spot rates have collapsed: Asia-U.S. West Coast rates have fallen 61% since January to $2,050 per FEU, while East Coast rates have dropped 53.7% to $3,100 per FEU . Blank sailings are rising, with vessels leaving Asia half-empty. Amazon and Five Below are among the major retailers reducing orders from Asia. Container imports jumped 15.3% in 2024, but forecasts now predict a 20-27% decline through the summer. Exporters, particularly agriculture and forestry suppliers, are also squeezed, facing 125% retaliatory tariffs from China. Truckload and intermodal rates remain stagnant, while U.S. factory output fell sharply in March. US Apparel Importers Brace for Long-Term Volume Declines According to Trade Partnership Worldwide, a 124.1% tariff on Chinese clothing and footwear is expected to reduce U.S. apparel imports by 1.6% annually . China still accounts for 41.7% of apparel shipments, leaving limited flexibility for diversion. The American Apparel and Footwear Association (AAFA) is warning of price hikes and mounting infrastructure stress as sourcing pivots toward Vietnam, India, and Indonesia. A looming May 2 deadline for de minimis exemptions could further complicate flows and delay deliveries. Even with a temporary 90-day pause in reciprocal tariffs, the policy uncertainty already affects long-term planning. AAFA CEO Steve Lamar calls the shifting policies “chaotic,” and warned that high tariff pressure will hit both importers and U.S. manufacturers reliant on Chinese components. Port and rail capacity limitations at larger gateways are adding to concerns. Retailers now face rising costs, shrinking margins, and operational delays — all while consumer demand continues to shift rapidly. Freight Pricing Gains Lose Momentum According to the TD Cowen/AFS Freight Index, Q1 truckload rates rose 5.9% above the 2018 baseline, but are expected to decline slightly in Q2. Shippers are responding to tariff threats with aggressive front-loading and shorter-haul routes, driving per-shipment costs to three-year lows. LTL carriers remain focused on profitable lanes and high-quality freight rather than chasing volume. The index forecasts a 0.7% year-over-year increase in LTL rate per pound for Q2 , despite sustained demand softness and macro uncertainty. A key driver behind the softening spot market conditions is a shift to shorter hauls and regionalized distribution, pushing per-shipment costs to their lowest point in more than three years. This trend reflects how retailers and manufacturers are repositioning inventory in response to tariff volatility, as NRF’s Jonathan Gold and DAT analyst Dean Croke noted. Meanwhile, the LTL sector is seeing a 4% rise in fuel surcharges, offsetting lower weights and shorter hauls. With the freight market still under pressure after 26 months of contraction, optimism remains subdued as we enter the midyear period. US Truckload Freight Spot Rates Continue to Fluctuate National benchmark rates have experienced a decline across all categories. As of April 18, dry van decreased by 4 cents to $1.62, reefer by 2 cents to $1.88 , and flatbed by 3 cents to $2.16. This marked the first overall decrease since late January, signaling potential shifts in market dynamics. These changes can be attributed to factors such as tariff uncertainties and tighter capacity, especially affecting the flatbed market. Flatbed rates rely heavily on manufacturing activity in the country, which has been particularly hard-hit by the ongoing trade war with China, and to some extent, with the rest of the world. US Finalizes Tiered Fee Plan Targeting Chinese Ships The U.S. is moving forward with a revised plan to levy voyage-based fees on Chinese-owned and Chinese-built ships calling at American ports. The U.S. Trade Representative (USTR) announced the measure as part of a broader Trump administration effort to counter China’s dominance in shipbuilding and logistics while reigniting domestic ship construction and port infrastructure investment. Starting in six months, Chinese operators will be charged $50 per net ton, with an annual increase of $30 for three years . Non-Chinese carriers using Chinese-built vessels will face lower rates, beginning at $18 per ton or $120 per container, with annual increases. The USTR capped fee applications at five voyages per vessel annually, scaling back its original, more punitive per-port-call proposal after intense industry pushback. The fees are tied to findings from a USTR investigation, which concluded that China’s shipbuilding dominance — producing 29% of global fleet capacity and 70% of all container ships on order — stemmed from unfair trade practices. Exemptions apply to ships arriving empty, those in the Great Lakes or U.S. territories, and some bulk exports. LNG vessel transport restrictions will phase in over 22 years to support U.S. production. China’s largest container carrier, Cosco Shipping Lines, has sharply criticized the USTR’s plan. In a strongly worded statement, Cosco labeled the move as “discriminatory,” and warned it would disrupt global industrial and supply chain stability. Cosco denied allegations from that USTR investigation that claimed China manipulated its shipping and shipbuilding sectors to gain an unfair advantage. The carrier said it upholds “integrity, transparency, and compliance” in global competition and remains committed to ensuring the resilience of international trade. Walmart Investing $6B in Mexico, Central America Store Expansion Walmart of Mexico and Central America will invest $6 billion to open new stores across the region , reinforcing its long-term commitment to growth in Latin America. The expansion will include Bodega Aurrera, Walmart Supercenters, Sam’s Club, and Walmart Express formats, building on a robust network of 3,200 stores across all 32 Mexican states. This latest move echoes Walmart’s earlier $1.3 billion investment in 2016 for regional distribution and operational upgrades. The retailer entered the Mexican market in 1991 with a Sam’s Club in Mexico City. In a statement, Walmart said the new expansion reflects confidence in the region’s economic potential and consumer demand. Globally, Walmart continues to invest aggressively in infrastructure and store development. The company has pledged about $4.5 billion for its Canadian operations and $1.3 billion in Chile to build 70 new stores and a distribution center. In the U.S., Walmart is executing a five-year plan to build or convert more than 150 stores while modernizing 650 existing locations under its “Store of the Future” initiative. Experience Seamless Shipping with Entourage Freight Solutions Entourage Freight Solutions believes in total transparency in the shipping process. That is why we invest in tech solutions that track every shipment extensively, monitor every driver, and extract every bit of efficiency without sacrificing quality. Our state-of-the-art platform utilizes cloud-based GPS tracking to keep you informed, reroutes shipments on the fly to avoid delays, and even responds to real-time market changes to ensure you receive your shipment on time and as soon as possible. Our Services Full Truck Load (FTL): When you need a truck all to yourself. Less-Than-Truckload (LTL): Efficient solutions for multi-stop shipments or combining smaller loads to save on costs. Refrigerated Trucking: Keeping your temperature-sensitive products fresh and safe. Cross-Docking: Strategically located facilities in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for streamlined consolidation, storage, and distribution. Ready to experience a new level of service and control in your freight shipping? Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.