US President-elect Donald Trump announced plans to impose 25% tariffs on all products from Mexico and Canada, plus an additional 10% on Chinese goods, starting January 20th. The tariffs will remain in place until China stops drug trafficking, particularly fentanyl, and Mexico and Canada address illegal immigration into the US, according to Trump’s statement.
The automotive sector faces the largest impact, with over $200 billion in affected imports. The tariffs could lead to higher car prices and reduced sales across the industry.
Improbably short window for front-loading
US ocean freight shippers looking to front-load imports before the tariffs take effect face an extremely compressed timeline. With a two-week transit time from China to a US west coast port, goods would need to be loaded in China during the first week of January at the latest, just six weeks from the announcement.
Uncertainty remains
Whether the tariffs will actually be introduced on January 20th remains to be seen. The announcement creates planning challenges for procurement managers who must weigh the costs of front-loading inventory against the possibility that the tariffs may not be implemented as stated.
This article is part of a more comprehensive shipping market analysis. For the full shipping market analysis, visit: https://app.vespertool.com/market-analysis/2494