by A1 WorldWide Logistics | Feb 7, 2025 | Economic trends, Importing, Transportation
An executive order signed by President Donald Trump could soon see China tariffs impacting air cargo. On February 1st, Trump imposed a 25% tariff on Canada and Mexico imports and a 10% tariff on China imports. The order also eliminated duty-free exemptions for low-value e-commerce goods imported from the countries to the U.S. While Trump has deferred Canada’s and Mexico’s tariffs for a month, China’s hikes will take effect on February 10th. The taxes are to stop illegal immigration and the smuggling of illicit drugs into the U.S. Along with directly affecting international shipping, the tariffs will impact China’s air cargo industry.
How Are the China Tariffs Impacting Air Cargo?
In 2024, China exported approximately $2.62 trillion in goods, making it the largest exporter globally. A significant portion of goods imported into the U.S. are e-commerce shipments from China by air. Nearly 1.3 million tons of e-commerce air imports fall under the duty-free exemption that Trump’s executive order eliminated. The de minimis is a provision that exempts goods $800 or less to a single person per day from taxes. Shippers and online retailers like Temu in China use this to legally avoid import tax on smaller, larger-volume imports. The CBP (Customs Border and Protection) notes that 61% of de minimis entries are from China.
De minimis shipments from China could now have tariffs of up to 35% due to the executive order. Without the de minimis rule, a $50 package bought in Temu may be double the amount due to the fees. Vendors from marketplaces like Temu have built warehouses in the U.S. in the past few years to avoid additional costs. They also have relocated to nearby locations like Vietnam and Thailand to be able to send de minimis shipments. China filed a complaint to the WTO (World Trade Organization) challenging the cancellation of the 10% tariff and duty-free exception. In a country response, China also introduced tariffs of up to 15% on various U.S. goods like coal and oil.
What Can The Tariffs Mean For The Air Cargo Industry?
The tariffs could negatively affect air cargo due to the amount of goods China imports to the U.S. by air. Ending de minimis may significantly reduce airfreight rates as importers decrease the volume of imported goods. Reducing daily de minimis imports could result in overcapacity in the air cargo industry and decline rates. Rates declined during this period due to the Chinese New Year, when demand was lower than usual. A tariff increase will also directly impact customers since sellers could pass on the higher costs.
While the tariffs could impact cargo transport, they should not stop you from importing into the U.S. However, shippers should take the proper steps to mitigate potential disruptions to their supply chains. An ideal way to get started is by speaking to a freight forwarder. Forwarders act as intermediaries between the shipper and the good’s final destination. Along with transporting your cargo, they offer various services like providing documentation, negotiating rates, vetting carriers, warehouses, and more. Contact A1 Worldwide Logistics at 305-425-9752 or info@a1wwl.com to talk to a forwarder regarding moving your goods internationally. Whether you’re shipping by air, sea, or land, we ensure the success of your shipment.
by A1 WorldWide Logistics | Feb 4, 2025 | Economic trends, Importing, Shipping Logistics
President Donald Trump imposes new import tariffs on top trading partners after months of expectation. On Saturday, February 1st, Trump signed an executive order to enforce a 25% tariff on imports from Mexico and Canada. Canadian energy imports will have a tax increase of 10% separately. The order also includes an added 10% tariff on goods imported from China. Trump implemented the new tariffs through the International Emergency Economic Powers Act (IEEPA). He notes, “This was done through the IEEPA because of the major threat of illegal aliens and deadly drugs killing our citizens.” With the amount of cargo that the U.S. imports from the countries yearly, the tariffs will significantly impact international trade.
What Should You Know As Trump Imposes New Import Tariffs?
In terms of importation, Mexico, China, and Canada are the most significant trade partners of the U.S. Due to the volume of shipments, many supply chains will feel the strain of higher taxes. The tariff hike could increase costs for businesses that import cargo internationally. For example, most of the cars manufactured and imported by the automotive industry are in Mexico. Along with reduced profit margins, the tariffs may result in higher costs that the company passes to customers. The uncertainty for business could result in a short-term economic slowdown. Domestic shipping for drayage services that pick up cargo from ports will also feel the strain from the tariff hike.
Despite the supply chain disruptions, Trump believes these tariffs will benefit the U.S. in the long run. A goal behind the hike is to address legal immigration and drug trafficking. Trump Recently stated, “Thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before.” China is also responsible for the majority of illegal importation of fentanyl into the U.S. Another purpose behind the tariffs is to grow the manufacturing of goods within the U.S. instead of relying on importations. A belief is that the increase in tariffs could hurt the U.S. economy and cause inflation.
How Are Mexico and Canada Responding to the Tariffs?
The countries impacted by the new tariffs immediately responded directly following the announcement. Trump spoke to Mexican leaders and Canada’s prime minister, Justin Trudeau, regarding the tariffs on January 3rd. During the meeting, the U.S. and Mexico negotiated a deal to delay the tariffs for one month. Similarly, Canada reached an agreement to postpone the tariffs for one month. The hikes for China will still take place on Tuesday. Once Trump announced the hikes, Canada immediately responded by placing matching 25% tariffs on nearly $155 billion in U.S. imports. Trudeau notes, “Like the American tariffs, our response will also be far-reaching and include everyday items.” China responded to the tariffs by announcing that it would file a lawsuit with the WTO (World Trade Organization).
Shippers should be ready for potential disruptions with the new tariffs significantly impacting international trade. Not preparing can result in monetary loss, delays, and disruptions in supply chains. It is vital to keep current with any news that may impact the status of your shipment. Using the help of a logistics provider is another way to prevent disruptions in your shipment’s transport. Reach A1 Worldwide Logistics at 305-425-9752 or info@a1wwl.com for assistance importing into or exporting out of the U.S. Regardless of the situation, we find the best action to take for protecting your shipment.
by A1 WorldWide Logistics | Jan 21, 2025 | Economic trends, Importing, Supply Chain
President Trump announced that he will impose a 25% tariff on February 1st for imports from Canada and Mexico. Last year, Trump revealed that he would implement the tariff hike during his first day in office. The president postponed the date to create an “External Revenue Service to collect tariffs and identify unfair practices. Along with the two countries, there are plans to implement tariffs of 10% to 60% for goods from China. Trump also raised the idea of a “universal tariff” but noted that the U.S. was not ready yet. With the countries impacted by the taxes bringing in hundreds of billions yearly, a tax increase can significantly affect trade.
Why Is Trump Imposing 25% Tariffs On February 1st?
Trump noted that he would implement tariffs on the imports for reasons including illegal immigration and drugs entering the U.S. In 2024, the president stated, “As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before.” China is also the most popular illegal importer of fentanyl into the U.S. Another reason for the tariff increase is to increase domestic manufacturing by making importation more costly. Trump believes creating new jobs in the U.S. will reduce the federal deficit and lower food prices.
While Trump believes the tariffs will benefit the U.S., it has faced backlash from the countries impacted. The biggest trade war in decades could be possible with approximately 75% of Canada’s imports going to the U.S. Canada’s prime minister noted, “If the president does choose to proceed with tariffs, Canada will respond – and everything is on the table.” The countries affected by the taxes may impose their retaliatory tariff. Trump’s proposed hikes could also face legal challenges from existing trade agreements like the USMCA (United States-Mexico-Canada Agreement). Signed into effect in 2020 by Trump, he will have the opportunity to renegotiate the deal in 2026.
How Will The Tariff Hikes Impact International Shipping?
Mexico, Canada, and China are the U.S.’s biggest importers, meaning a tariff hike can significantly impact international shipping. Higher tariffs could increase shipping costs and disrupt supply chains. Companies from industries like the automotive industry rely on importation, and sourcing production back to the U.S. can be challenging. Economists argue that increasing import taxes could lead to inflation and job loss. While the increase will affect moving cargo internationally, it will also impact domestic shipping. Drayage services that transport port imports could see a decline in volume, resulting in led business. To combat the tariff increases, U.S. importers may begin outsourcing to different countries. Various companies have already considered relocating production to the U.S. in response to the tariffs.
With the rise in tariffs potentially affecting both the shipper and businesses, you must take steps to mitigate disruptions. Failure to take the correct steps can lead to delays, monetary loss, and cargo loss. An ideal solution is to consider partnering with a trusted third-party logistics (3PL) provider. 3PLs offer solutions for navigating the complexity of international shipping and ensuring a successful shipment. These solutions include freight forwarding, warehousing, customs brokerage, and supply chain management. Reach A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com to speak to an expert regarding your cargo’s movement.
by A1 WorldWide Logistics | Jan 16, 2025 | Economic trends, Importing, Shipping Logistics
Various situations in the international shipping industry are resulting in U.S. retail imports surging. The Global Port Tracker is predicting that the import volume for December 2024 will be up 14.3% y/y. This number is 19% over the NRA’s (National Retail Association) predicted volume. The NRA also predicted that the total TEUs (twenty-foot equivalents) in 2024 will total 25.6 million. This is more than 15% of the TEUs in 2023. Scenarios from a potential port protest (that shippers avoid) and freight tariffs are causing the surge. This article will explain why importations are surging and how to prepare when importing into the U.S.
Why Are U.S. Retail Imports Surging?
Imports into the U.S. were rising before 2025 due to situations like a port strike. A contract extension between the ILA (International Longshoremen’s Association) and the USMX (United States Maritime Alliance) expired in 2025. Unresolved talks regarding wage increases and automation between the parties have increased the chances of an East and West Coast port strike on January 15th. Due to the fear of port shutdowns, shippers began importing a significant volume in late 2024, including retail freight. Although the parties reached a new contract avoiding a potential shutdown, the NRA predicts that imports will continue to rise. Another reason imports are growing is the tariff increases President Trump will introduce on the first day of office.
In particular, Trump will impose a tariff increase of 25% on all imports from Mexico and Canada. The hike will also include a 10% tax on all Chinese goods entering the U.S. Retailers import a high volume of cargo before the inauguration date to avoid potential cost increases. The customer will pay these costs. The NRF predicts that the tariffs could cost American customers $46 to $78 billion in annual spending power. To prevent the impact of tariff increases, retailers are looking for solutions like importing from different parts of the world. Various retail companies have already announced plans to reduce imports from China.
Will The Trend Continue To Rise?
Even with Trump imposing tariffs, the NRA believes the momentum will continue through the first quarter of 2024. The NRA predicts that February won’t increase much due to the Chinese New Year. An agreement reached between the ILA and USMX could also decrease the import volume by lessening urgency. Shippers must be ready to navigate scenarios like surging import volumes. When cargo growth comes into U.S. ports, this can sometimes lead to port congestion and delays. To prepare for potential disruptions, a shipper must be current with any news affecting their shipment. They can do this by constantly reading news reports and speaking to professionals.
When importing into the U.S., a shipper must also understand the regulations they must follow. Failure to know the procedure can lead to delays and loss of cargo. Due to the numerous guidelines, it may be beneficial to use the assistance of a customs broker when importing. Customs brokers are individuals or firms that act as intermediaries between importers and U.S. customs. They ensure customs clearance by offering various services like documentation, calculating taxes, and customs compliance. Brokers also educate shippers on the importation process while helping them save time. Contact A1 Worldwide Logistics at 305-440-5156 or info@a1wwl.com to speak to a broker regarding clearing your goods from customs.
by A1 WorldWide Logistics | Jan 9, 2025 | East Coast Protests, Economic trends, Shipping Logistics
The ILA and USMX reach an agreement nearly a week before the original contract extension expires. In a January 8th, 2025, announcement, the two parties agreed to replace the expiring contract with a tentative 6-year contract. A joint statement stated, “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf Coast ports.” The new deal encompasses an estimated 25,000 workers across 14 port authorities from Boston, Massachusetts, to Texas. However, the contract does not include ILA workers in RORO (roll-on/roll-off) jobs across the locations. This agreement averted a potential second port strike by the ILA that would have severely disrupted international shipping.
Why Was There A Potential Strike?
On October 1st, 2024, the ILA had a strike in East and Gulf Coast ports across the U.S. For over a year, the ILA has been protesting for better employee wages and to stop automation at ports. During the pandemic, the USMX made approximately $400 billion in revenue, which the ILA felt was not paid back. Especially with growing inflation and as the cost of living increases. Another issue has been the introduction of automated equipment at ports, which threatens job security. The ILA believes that the USMX is replacing workers to increase corporate profit. USMX has the opposite belief that automation will create an opportunity for new jobs to maintain the equipment.
After a three-day strike in October, the ILA and USMX agreed to extend the contract. Along with a 61.5% pay increase, the extension included a $4 an-hour wage growth yearly over six years. The original contract ending the October 2024 protests expired on January 15th, 2025. Talks that started on January 7th resulted in a finalized master contract between the parties lasting six years. The new contract benefits ILA and USMX by increasing wages and job security while allowing automation. While the two sides will continue to operate under the current contract, they will meet with the Wage Scale Committee to ratify the final terms of the agreement.
What Will Be The Impact As The ILA and USMX Reach An Agreement?
The most significant impact of the new deal is the potential disruptions that the two parties have avoided. Analysts reported that the October 1st strike resulted in an economic deficit of nearly $5 billion daily. A second strike could further hurt the economy, with port stoppage and congestion causing container buildup. With a financial loss for importers and exporters, customers, ports, and truckers felt the strain. The backlogs of containers would have severely hurt businesses by creating massive delays in supply chains.
Trade groups and businesses positively welcomed the news since it provided certainty and avoided further disruptions. Another effect of the new contract is that shippers may regain the confidence to ship internationally. While moving cargo may seem like an opportunity for your business, shippers must take steps to prevent disruptions. This can include speaking to a logistics provider for assistance to get started. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9752 for a quote for importing into or out of the U.S. We are with you from the start of the shipping process until the goods reach the final destination.
by A1 WorldWide Logistics | Jan 8, 2025 | East Coast Protests, Economic trends, Shipping Logistics
Port labor talks are resuming between employers and dockworkers, with the current contract extension expiring on January 15th. Negotiations between the ILA (International Longshoremen’s Association) and the USMX (United States Maritime Alliance) have stopped since October 2024. The pause was after a strike on October 1st that lasted after three days. A tentative agreement ended the protest by extending the existing contract to January 15th, 2025. The agreement promised an hourly pay increase of 10% in the first year and 62% over the six-year deal. Over the last year, ILA workers have been protesting for higher and against using automation at ports. Specifically, they are fighting for wage hikes like West Coast ILWU dockworkers received in 2022.
During and after the pandemic, international shipping rates surged to incredible amounts. Specific container rates rose from $2,500 to $12,000. From 2020 to 2023, the USMX reportedly made nearly $400 billion. ILA President Harold Daggett noted, “Since COVID, they’re making billions of dollars, but they don’t want to share it.” International shipping companies have already announced container surcharges in the scenario that a strike does occur. They advise customers to retrieve their containers and return empty ones before January 15th. If the parties fail to reach an agreement by the date, associations like the NRF (National Retail Federation) are pushing for another extension.
The Reason Why Port Labor Talks Are Resuming
The reason why negotiations are resuming is to avert a situation similar to October’s port strike. While the October strike only lasted three days, a potentially longer one can have numerous consequences. Analysts approximate that a prolonged strike can result in an economic loss of $0.5 to $5 billion daily. Numerous supply chains rely on the ports, and disruptions can lead to delays and monetary loss. Shippers have already rerouted their shipments to ports away from ports affected by possible protests. The results of the talks are noteworthy, with East and Gulf Coast ports handling significant volumes of U.S. imports.
Automation Is A Primary Concern In The Talks
Although the October 2024 talks ended the strike last year, they did not address the issue of port automation. Automation is a huge concern due to the belief that it threatens the job security of ILA dockworkers. Dennis Daggett, the union’s vice president, stated, “It’s about replacing workers under the guise of progress while maximizing corporate profits.” The ILA also doubts the effectiveness of implementing automated systems and that the cost will outweigh the productive gains. Conversely, the USMX argued that semi-automated cranes are essential for improving efficiency and making U.S. ports competitive globally. Ports in countries like China have increased the volume of cargo movement due to these technologies.
The USMX also believes that automation will create new jobs for handling and maintaining the strategies. President-elect Donald Trump has backed the ILA’s stance against automation, noting that it will hurt American workers. Despite the concern that a potential port strike may cause, it should not stop you from moving your shipment. You should, however, take preventive steps beforehand and be up-to-date with the current situation. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9513 for a quote to move your goods internationally. We find the best action to ensure cargo moves to the final destination.
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