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Trump tariff threats leave supply chain stakeholders scrambling for answers

25% tariffs on imports from Mexico, Canada could begin on Saturday

Shippers and logistics professionals face increasing uncertainty in the global supply chain as possible U.S. tariffs on Mexican and Canadian draw near. (Photo: Jim Allen/FreightWaves)

A lot of people are hungry for guidance on how to navigate the supply chain if 25% tariffs on imports from Mexico and Canada come into effect on Saturday, judging from a recent webinar by global supply chain provider Kuehne + Nagel.

The “Navigating Unprecedented Global Trade Disruptions” webinar Jan. 15 drew around 1,500 people – about three times more than other webcast discussions at Kuehne + Nagel.

“I was blown away and very encouraged by the turnout,” Greg Tompsett, vice president of customs brokerage USA at Kuehne + Nagel and host of the webinar, told FreightWaves in an interview. “It just shows people are desperate for information.”

President Donald Trump has threatened to impose the tariffs as part of an initiative to get Mexico and Canada to do more on migrant and drug smuggling issues.


While Tompsett believes the threats could be a bargaining tactic, he said if they are implemented on Saturday, shippers will need to immediately take stock of what goods they have in the supply chain.

“What is already out on the water,” Tompsett said. “What purchase orders have already been booked? What are things that we can’t really change or shift, and what temporary options do we have to buy us a little time? Can we move something in bond – that’s where it hasn’t technically been imported yet, but it gets in and we set it off at a bonded warehouse, and we can keep it at bay for a little bit – and what’s that cost? Can we defer or hold off importing it? Do we have the ability to move it in a foreign trade zone – those are things we’ll be looking at.”

In 2018, during Trump’s first term as president, he imposed a 10% tariff on $200 billion of imports from China.

The 2018 tariffs acted as a sort of stimulus to the freight industry, boosting trucking rates and tightening capacity, according to a 2019 FreightWaves report.


Tompsett said some transportation providers may raise their rates if tariffs are imposed Saturday.

“As we’ve seen in the past, many companies have taken advantage of this and used it as an opportunity to charge premiums or surge pricing or different elements like that,” he said. “I would be naive to think that some companies won’t try to do so again. But I think each company is going to try to weigh what value they can bring to their customers, and what they can do to try to maintain that business. I think we’ve also seen in the past, some companies think it’s great to try to grab a little bit of money in the short term, but a lot of times you burn those relationships when you try to do that.”

As of Monday, the SONAR National Truckload Index Linehaul Only (NTIL) showed the nationwide dry van spot rate was at $1.85 per mile, down 2% week over week and 4.6% year over year.

The NTIL measures the average spot rate for dry van loads moving more than 250 miles excluding the total estimated cost of fuel. The NTIL has been trending higher over the past year and a half but has been moving downward since Jan. 11.

FreightWaves SONAR National Truckload Index (NTIL.USA) shows dry van spot rates at $1.85 per mile as of Monday. To learn more about FreightWaves SONAR, click here.

Trump’s tariff policies could also shift more supply chains and manufacturing operations back to the U.S., but it will take time, Tompsett said.

“I don’t know if it’s going to be to the degree that is being hoped for, or if it’s going to be the kind of high-end manufacturing jobs that people want to associate it to. People are hoping, but I just don’t know that I ever see that era coming back to U.S. manufacturing,” Tompsett said. 

Nari Viswanathan, senior director of supply chain strategy at Coupa Software, said while businesses and supply chain leaders can’t control trade policies, they can control how they respond to potential tariffs.

Foster City, California-based Coupa Software offers a cloud-based software platform that aims to help businesses optimize their supply chains.


“Preparing for tariff disruptions before they happen is essential, and plans should happen in the most optimal way possible,” Viswanathan told FreightWaves in an email. “Those who don’t may risk a severe revenue downturn in 2025, and businesses must prioritize resiliency and agility. When preparing for tariffs, regulations, and geopolitical fluctuations, it’s critical to have complete visibility of the end-to-end supply chain.”

When Trump imposed tariffs on China in 2018, they spurred some supply chains to move away from China and relocate to countries such as Vietnam, Thailand and Mexico.

Companies should be developing contingency plans and risk scenarios now to find the best supply chain solutions, Viswanathan said.

“Running scenarios with different types of taxes and tariffs can help businesses design a realistic and strategic perspective on managing future costs,” Viswanathan said. “Developing contingency plans for different tariff forecasts can include shifting sourcing, increasing local production, or adjusting product prices. Additionally, conducting a supplier risk assessment can help identify a business’ exposure to tariffs, especially if suppliers are in Canada or Mexico. This assessment can help leaders make better decisions when diversifying suppliers and evaluating the costs and benefits of producing goods within different geographies.”

Tompsett, who said he’s a student of trade policy history, said he feels Trump’s tariff threat is a bargaining chip against Mexico, Canada, China and other nations that do business with the U.S.

“My gut instinct is that a person doesn’t normally set a deadline 10 days out if their intention is just to implement it,” Tompsett said. “This administration certainly could have just implemented it at midnight Jan. 20. My guess is that we will see this be deferred until the United States-Mexico-Canada Agreement, which expires in July of 2026, is renegotiated. My guess is we see that deferred until then, and then there’ll be some response in the way of increased border security. Then this administration will check that off as, ‘Hey, look, look what I achieved. I used this as a weapon, and I got us the increased border security we needed.’ Each of those countries, Canada and Mexico, will say, ‘Hey, look what I did. I got him to hold back on the 25% tariffs.’ Everybody marks it as a win, and then they deal with it 18 months from now.”

Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Maryland and Texas. Contact nmahoney@freightwaves.com