Understanding the Impact of New Tariffs and Trade Tensions on Global Trade and the Trucking Industry

As of April 8, 2025, the world is seeing major changes in global trade, particularly with the United States, China, Canada, and Mexico. These new tariffs and rising trade tensions are shaking up the way goods are moved across the globe, especially for the trucking and logistics industry. But what exactly are tariffs, and how do they impact trade, businesses, and the economy? Let's break it all down in simple terms, especially for those who are just starting to learn about how global trade works.

What Are Tariffs?

A tariff is like a tax that one country puts on goods imported from another country. For example, if the U.S. buys steel from Canada, the government might add a fee on that steel to make it more expensive. Countries use tariffs for various reasons, but often it’s to protect local businesses or to respond to trade practices they don’t like. This tax makes goods more expensive to buy, which can affect the prices of things we use every day, like cars, electronics, and even food.

How Do Tariffs Affect Trade?

When a country adds tariffs, it impacts the flow of goods in and out of that country. Countries importing goods have to pay the tariff, which increases the cost of those goods. Sometimes, these costs get passed onto consumers, making products more expensive. On the other hand, the country that imposes the tariffs may hope that the higher prices will encourage people to buy more products made within their own borders instead.

However, tariffs can lead to trade disputes, especially when other countries decide to add their own tariffs in retaliation. This is called a "trade war." These trade tensions can cause confusion in supply chains, raise prices, and even lead to job losses in some industries.

How Tariffs Affect the Country Putting Them In Place

It might seem like putting tariffs on other countries’ goods only affects the country paying the tariff, but it can affect the country imposing the tariffs as well. If a country’s products become more expensive in another country, people in that country might buy less. This can harm businesses that rely on selling goods internationally. For example, when the U.S. added tariffs on steel and aluminum imports, it not only hurt the countries exporting those materials but also caused prices for U.S. manufacturers to go up, affecting things like car prices and construction costs.

Tariffs and the Trucking Industry

The trucking and logistics industry is a key part of how goods move around the world, and tariffs directly impact how trucks are used. With the new tariffs, the costs of materials like steel and aluminum have gone up. This means the price of trucks and trailers, as well as repair parts, has increased. For trucking companies, this means higher costs for maintaining and expanding their fleets.

Tariffs also increase the price of freight, which is the cost of shipping goods. When businesses face higher costs due to tariffs, they may pass those costs onto customers, leading to higher prices for consumers. However, this can also lead to fewer shipments because businesses might try to find ways to save money by reducing the amount of goods they ship.

Another challenge is that tariffs can cause disruptions in supply chains. When countries change their trade rules, businesses have to find new suppliers, adjust their routes, and deal with potential delays at border crossings. Trucking companies might have to reroute deliveries or wait longer at customs, which can slow down the entire supply chain.

The Impact of Tariffs Across the World

Tariffs don’t just affect one country or region—they ripple across the globe. The European Union (EU), Asia, Africa, and South America all feel the effects of tariffs in different ways:

• The European Union (EU): The EU has had to adjust to tariffs imposed by the U.S. and China. Countries in the EU may face higher costs for things like agricultural products, machinery, and vehicles. In some cases, the EU has responded with its own tariffs on U.S. goods.

• Asia: Asian countries, especially China, are heavily involved in trade disputes with the U.S. The U.S. has imposed tariffs on Chinese goods, leading China to retaliate with tariffs of its own. This back-and-forth impacts businesses and workers in both countries, and it also affects the broader Asian economy.

• Africa: African countries are often caught in the middle of trade tensions between bigger nations like the U.S. and China. While Africa’s trade with the U.S. and China is relatively small, the disruption in global trade still affects African exporters, especially in industries like agriculture and natural resources.

• South America: In South America, countries like Brazil and Argentina are affected by the global shifts in trade policies. With major trading partners like China and the U.S. imposing tariffs, South American countries must find new ways to sell their goods and keep their economies stable.

Countries Affected by Tariffs

The recent tariffs and trade tensions are affecting many countries around the world. Here is a list of some of the key countries impacted:

United States

• Imposing tariffs on various imports, including steel, aluminum, and goods from China, Mexico, and Canada.

China

• Responding to U.S. tariffs by imposing tariffs on U.S. exports, including crude oil, farm equipment, and large vehicles.

Canada

• Imposing 25% tariffs on $30 billion worth of U.S. goods, including steel and aluminum.

Mexico

• Imposing tariffs ranging from 5% to 20% on U.S. products such as pork, cheese, produce, steel, and aluminum.

European Union (EU)

• Facing tariffs from the U.S. and China, which impacts agricultural products, machinery, and vehicles.

Brazil (South America)

• Affected by global shifts in trade policies and tariffs imposed by major trading partners like China and the U.S.

Argentina (South America)

• Similarly impacted by the U.S. and China tariffs, particularly in the agricultural sector.

India

• Potentially impacted by tariff increases, especially as the U.S. shifts its trade relationships with China and other countries.

Japan

• Trade relations with the U.S. have been affected by tariffs, particularly on steel and aluminum exports.

South Korea

• Affected by global tariffs, particularly in the steel and automotive sectors, with changes in trade dynamics with both the U.S. and China.

These countries are directly impacted by either U.S. tariffs or retaliatory tariffs from the U.S. and other countries like China and Canada. As trade wars intensify, other nations could also see secondary effects in their exports and imports.

Materials Tariffed and How Much

Several materials have been heavily impacted by tariffs. For example:

• Steel and aluminum: The U.S. imposed a 25% tariff on steel and a 10% tariff on aluminum imports from many countries, including Canada, Mexico, and China.

• Farm equipment: China placed tariffs on U.S. farm equipment as part of its response to U.S. tariffs.

• Crude oil: Both the U.S. and China imposed tariffs on each other’s crude oil, affecting the energy sector.

These tariffs raise the costs of materials, making products more expensive for manufacturers and, ultimately, consumers.

A Look Back: The History of Tariffs

Historically, tariffs have been used for centuries, but the impact of tariffs was most notably felt during the Great Depression in the 1930s. Countries around the world raised tariffs in an effort to protect their economies, which led to a massive decrease in global trade. In more recent history, tariffs have been used in various trade wars, especially between the U.S. and China. The goal of these tariffs is often to protect local industries or to force another country to change its trade practices.

The Silver Lining in the Tariffs: Closing a Tax Loophole

One potential silver lining in the Trump administration's new tariff announcement is that companies like SHEIN and Temu—known for selling cheap, fast fashion—may soon face higher prices on their goods. The U.S. is ending a nearly century-old tax loophole that saved companies from paying billions of dollars in fees on cheap imports, most of which come from China.

Starting May 2, 2025, all postal items valued at or under $800—which previously qualified for the “de minimis” exemption—will now be subject to a duty of either 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025). This change is significant because it may make products from SHEIN, Temu, and similar companies more expensive, which could slow the mass overconsumption of cheap, unsustainable goods. While the broader impact of these tariffs might be negative, this could be one of the few positive outcomes—making the consumption of cheap, unsustainable goods more costly and, hopefully, encouraging more sustainable purchasing habits.

Conclusion

In summary, tariffs are a way for countries to regulate the flow of goods across borders, but they come with both advantages and challenges. While they can protect local industries, they can also lead to higher prices and supply chain disruptions. The trucking and logistics industry is directly affected by these tariffs, as increased costs for materials and shipping can lead to higher freight prices and delays in delivery. As global trade continues to evolve, businesses in the trucking and logistics sector will need to stay adaptable to manage the impact of tariffs and trade tensions effectively.

By staying informed, optimizing operations, and diversifying services, trucking companies can continue to thrive in this changing global trade environment.