Global Trade Dynamics Shift Amid Rising Tariffs and Supply Chain Challenges
In recent months, the landscape of global trade has been marked by significant changes, driven by rising tariffs, evolving supply chain strategies, and geopolitical influences.
The US Department of Commerce has reported a spike in penalties for import and export violations, with fines set to increase soon. This includes breaches related to seafood, wildlife, and the 2018 Export Controls Act. Hugo Pakula, CEO of Tru Identity, emphasized the importance of compliance, stating, “It has never been more important to stay ahead of non-compliance – and it has never been more costly [not to comply].”
Meanwhile, Mexico has announced increased tariffs on apparel imports, impacting companies leveraging nearshoring strategies. Ryan Martin, president of ITS Logistics, noted, “The increased tariffs and cessation of duty-free imports puts apparel brands in a scramble to find alternative fulfillment solutions.”
In the US, incoming President Donald Trump plans to impose new tariffs on goods from Mexico, Canada, and China, potentially affecting trade dynamics. John Manners-Bell, founder of Transport Intelligence, highlighted the potential impact on China’s Belt & Road Initiative, stating, “President Trump’s tariff policy may provide additional momentum to the project as a result of Chinese manufacturers off-shoring production to neighboring countries.”
The air cargo industry is also experiencing shifts, with TIACA’s Director-General, Glyn Hughes, noting that increased tariffs could boost air cargo demand. However, he warned of capacity constraints, especially with potential strike action by the International Longshoremen’s Association. “I don’t think the air cargo sector has the capacity to move more than a microscopic percentage of the ocean freight affected by the strike,” Hughes commented.
As global trade continues to evolve, companies are urged to adapt their strategies to navigate these complex challenges and seize new opportunities.
