2025 Top 100 Importers & Exporters Commentary

By Lars Jensen

The high frequency of tariff changes effectively makes it impossible for importers to make any informed decisions.

To call the global trade dispute the US has launched in recent weeks“ turbulent” would be the understatement of the century.

Clearly, the root cause of the turmoil is the Trump administration’ s political agenda and aspirations. Whether a political agenda is problematic or not is a subjective question and does not have an objective answer. In that sense, the purpose of the following analysis is not to evaluate whether any specific political aspiration is desirable or questionable.

Instead, it seeks to look at the actual actions the government is taking and assess how they have impacted the container supply chain.

The obvious direct cause of the turmoil has been the US’ approach to tariffs. This has three different aspects: the anticipation of tariffs, the magnitude of the tariffs and the frequency with which they are changed.

The anticipation of tariffs led some importers to frontload cargo even before President Donald Trump’ s inauguration in January. This was possible for goods that were not time-sensitive and where the importer had excess storage capacity at low marginal cost.

The magnitude of the tariffs will be a key factor. For some tariffs, it will quite simply result in goods being more expensive for US consumers. As a result, the impact will be felt mainly as a reduction in demand for the goods in question, although the effect can be dampened either by some changes in sourcing to lower-tariffed countries or by consumers buying cheaper substitute goods when possible.

In the short term, there is anecdotal evidence that suggests US consumers increased spending in the week that followed Trump’ s announcement he would pause most tariffs for 90 days, advancing purchases they were expecting later in 2025 to get those goods before retailers increase prices tariffs impact them. To the degree this is happening, it will lead to reduced cargo demand later in 2025.

In the medium term, higher tariffs will lead to reduced demand simply due to the increase in prices. The current 125 % tariff on China and 10 % on everyone else approximately translates to a $ 5,000 annual increase in costs for the average US household.

In the very long term, it is clear that the US government’ s ambition is to see manufacturing moved to the US. Should that happen, it would of course reduce container import volumes, but there is no empirical evidence to suggest that companies would reshore production.

Recent attempts at using tariffs to move production back to the US did not lead to reshoring; instead, sourcing relocated to other non-US countries. One such example is the partial shift from China to Mexico given the tariffs introduced during Trump’ s first term. This did not materially lower container volumes, though, because the goods in Mexico are, to a large degree, made with Chinese and Asian components.

And this leads to the third aspect of the tariff impact: the frequency of changes. To change their supply chains— for either sourcing, manufacturing or both— importers must have a reasonable certainty of a stable trade environment going forward. The tariffs on China from the first Trump administration, combined with the uncertainty of the COVID-19 pandemic, led many to pursue a“ China-plus-one” strategy as that was considered more resilient. This is a slow, gradual shift playing out on a timeframe measured in years. Significant volumes shifted to Vietnam, Cambodia and Thailand, all three of which were suddenly saddled with reciprocal tariffs of more than 40 % under Trump’ s initial announcement April 2.

Less than a week after the tariffs went into effect, they were suspended for 90 days. This fits the previous pattern where Mexico and Canada received 25 % tariffs only to have them suspended after three days and then reimplemented after 30 days.

But sourcing patterns and supply chains are planned and modified over the course of quarters and years, not days.

The high frequency of tariff changes effectively makes it impossible for importers to make any informed decisions regarding changes to their sourcing locations or to invest in new manufacturing locations. This also makes it impossible to decide whether to locate a manufacturing unit in the US, as the financial baseline for the decision is extremely uncertain if tariffs change as rapidly and as dramatically as they have so far. No matter one’ s political preferences, the current situation prevents importers and supply chain providers from making any medium- or long-term decisions related to investments or changes in sourcing patterns. The only rational approach importers can take— and this is, to a large degree, what they are doing— is to maintain their current setup and make tactical day-to-day decisions, such as delaying cargo in the face of new tariffs in anticipation that said tariffs will be rapidly withdrawn or postponed.

email: lars. jensen @ vespucci-maritime. com

84 Journal of Commerce | May 5, 2025 www. joc. com