April 16, 2025
In today’s global market, it can be challenging to determine how to respond to newly announced reciprocal tariffs. These recent developments follow separate tariffs on goods from countries such as Mexico, China, and Canada across several product categories.
THE MAIN QUESTION BUSINESSES ARE FACING?
Should I act now or wait to see how things develop?
Key freight sectors—including automobiles, steel, and aluminum—are among those most impacted. These changes can complicate operations, increase shipping costs, and affect overall business efficiency and bottom lines.
On April 10, 2025, the U.S. Customs and Border Protection released updated guidance on previously announced tariffs, stating that imports from China, Hong Kong, and Macau would immediately incur an additional 125% ad valorem duty, on top of the existing 20%, totaling 145%.
They also announced the immediate suspension of country-specific tariffs that had gone into effect just one day earlier, on April 9, 2025. Mexico and Canada are excluded from this suspension, and the 25% tariff on goods imported from these countries that are not covered by the USMCA trade agreement will continue to apply.
On April 11, 2025, China’s Customs Tariff Commission of the State Council responded by announcing a tariff adjustment on imports from the U.S., increasing rates from 84% to 125%, effective April 12, 2025.
This ongoing political posturing has created a mixed picture for businesses trying to determine how to pivot or adjust their models to navigate this changing tariff climate. At current levels, some sources suggest that U.S. goods exported to China are no longer market-viable.
WHAT EXACTLY IS A TARIFF?
A tariff is a tax imposed on imported (or occasionally exported) goods, often used as a tool to protect domestic industries, generate government revenue, or gain leverage in international negotiations. Tariffs can take several forms:
- Import tariffs, the most common, are charged on goods entering a country—either as a percentage of value or a set amount per unit.
- Export tariffs apply to goods leaving a country, potentially impacting global competitiveness. These are less common and rare versus import tariffs.
- Special trade tariffs are imposed on specific goods to address particular policy concerns.
- Shipping tariffs in the freight industry can also refer to published rate schedules by carriers, which help maintain transparency and consistency in pricing—though these are distinct from government-imposed trade tariffs.
While tariffs can serve strategic purposes, they also raise the cost of doing business, especially in industries dependent on global supply chains.
WHO IS EXEMPT – AND WHO IS NOT
For businesses importing from Canada or Mexico, some relief exists under the U.S.-Mexico-Canada Agreement (USMCA). Goods that meet USMCA compliance requirements remain duty-free—though there are key exceptions.
Canada & Mexico:
- USMCA-compliant goods remain duty-free (excluding autos and auto parts).
- Non-compliant goods are still subject to a 25% tariff.
- The recent 10% tariff does not override USMCA or Section 232 rules.
Exempt Product Categories:
The following items are not affected by the new tariffs:
- U.S. made goods.
- Goods already subject to Section 232 (e.g., steel, aluminum, autos, and parts).
- Pharmaceuticals, semiconductors, copper, lumber, smartphones and computers.
- Energy or minerals not available domestically.
- Bullion or precious metals.
- National security-related goods under 50 USC 1702(b).
- Products listed on the April 3 exemption list (over 1,000 items).
THE REAL IMPACT ON FREIGHT COSTS
Higher tariffs have a ripple effect throughout the freight industry, increasing operational costs and complexities within compliance. As duties rise, businesses are forced to re-evaluate logistics strategies and pricing models.
Tariffs can contribute to:
- Higher freight rates, as carriers pass additional costs on to businesses.
- Increased expenses tied to fuel, labor, and shifting logistics partnerships.
- Compliance costs, such as tariff documentation, declarations, and audits.
- Efficiency delays, especially with new customs requirements and regulatory confusion.
- Supply chain disruptions, from sourcing alternatives to customs backlogs or a shift to domestic production.
In short, tariff hikes can significantly alter the cost-to-serve and operational efficiency across freight modes.
STRATEGIES FOR BUSINESSES
For supply chain professionals, staying proactive is key. Here are several steps that can help minimize exposure and maintain operational resilience:
- Reassess your customs bond to ensure it covers increased duties.
- Confirm that your goods qualify for USMCA to avoid unnecessary tariffs.
- Run a cost impact analysis to understand how the new tariffs will affect your cash flow.
- Update documentation processes to include the origin of products and materials, especially steel and aluminum.
Looking beyond the basics, new strategies may also be required to adapt quickly to ongoing tariff volatility. These may include:
- Adjusting stock levels or inventory cycles for greater flexibility.
- Shifting production or assembly to regions with lower tariff exposure.
- Utilizing bonded warehouses to delay or reduce duty payments.
- Reviewing and diversifying sourcing options.
Reworking transportation routes and purchase order management to optimize costs.
NEED HELP NAVIGATING THE CHANGES?
That’s where we come in.
At OpenRoad Global, we help businesses assess their risk, evaluate their options, and keep freight moving—even in a complicated trade environment. If you’re unsure how these changes impact your business, we can help you:
- Determine if your products are impacted
- Explore sourcing or routing alternatives
- Navigate documentation requirements for in-transit goods
- Clarify bonded warehouses or USMCA-related concerns
Reach out to your main point of contact at OpenRoad Global. We’re here to help you adapt, respond, and move forward with confidence.
RESOURCES
OpenRoad Global Custom’s Update from April 9, 2025
OpenRoad Global Custom’s Update from April 3, 2025
US Tariffs: What’s the Impact? | J.P. Morgan Research
Directives and Handbooks | U.S. Customs and Border Protection
China strikes back with 125% tariffs on U.S. goods as trade war intensifies
About OpenRoad
Since 2004, OpenRoad has been empowering companies to achieve more through innovative supply chain solutions and a relentless commitment to top level service. With a full suite of logistics services and the industry’s most advanced technological tools, we partner with companies to strengthen their supply chains, enabling them to operate more efficiently, manage their transportation spend, and ultimately serve their customers better.
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