2025 tariff uncertainty troubles supply chain managers ssi

02 Dec 2025 Tariff Uncertainty Troubles Supply Chain Managers

Posted at 06:00h in Carrier Contract Negotiations, Freight Audit, Freight Bill Auditing, Freight Cost Analysis, Freight Payment, Supply Chain Optimization by

2025 tariff uncertainty is hot topic right now and for good reason. At various campaign events prior to the election, President-elect Donald Trump stated, “To me, the most beautiful word in the dictionary is tariff.”1

Trump has promised a tariff between 10% to 20% on imports from most countries, with tariffs on Chinese goods at a minimum of 60% and tariffs on Mexican imports ranging from 25% to 100%.2

Of note, according to a recent State of Freight report published by CNBC, President-elect Trump has pledged to move quickly on aggressive new import tariffs.3

Today, three things appear certain for shippers in 2025.

1. Tariffs on most imports will increase.

2. Other countries are likely to retaliate, so tariffs on exports will also increase.

3. You will need to find every opportunity to cut costs to offset higher tariffs.

At SSI, reducing your parcel, freight, and shipping costs is what we do best. We provide cost-cutting services that will benefit you now and throughout the year ahead. See the links below to learn about these essential services:

This blog post will explore the impact that tariffs may have on you, share what other supply chain managers are doing now to prepare for tariffs, and provide insights on who will be the winners and losers if the proposed tariffs go into effect.

2025 TARIFF TROUBLES: WE’RE CURRENTLY IN A SEASON OF UNCERTAINTY

Tariffs were a cornerstone of the Trump campaign. Yet, a president cannot immediately and unilaterally increase tariffs without approval from Congress. Seemingly, Trump will receive support without too much resistance. Yet, some free-trade Republican lawmakers may reject high tariffs on America’s closest allies.4

Further, it’s certain there will be intense lobbying efforts in the weeks ahead by corporate leaders and US trade partners to request tariff exclusions. So, today, few US business leaders know precisely how their supply chain operations will be impacted by the new administration’s tariff policies.

Currently, shippers are exploring their options to frontload shipments ahead of inauguration day.5 A burst of activity is good news for shipping, rail, freight and logistics companies. An inrush of demand may push spot rates higher and give carriers an edge in end-of-year contract negotiations.

Of course, frontloading is only a temporary solution. Many companies are already exploring more diversified sourcing strategies to limit their exposure in China. More on that below.

2025 TARIFFS: NATIONAL RETAIL FEDERATION ISSUES WARNING

Let’s address the question, “what is a tariff?”. According to the National Retail Federation (NRF), “tariffs are a tax paid by American companies that import products – not by the foreign governments targeted by the tariffs.”6

The NRF has been outspoken in their opposition to the various tariffs proposed by the new administration. The organization expects consumer spending will slow because of what they anticipate to be dramatic retail price hikes on a wide range of goods.

For example, consumers can expect about a 30% increase in household appliances and footwear. In total, the Trump tariffs may drive up consumer prices by as much as $78 billion a year, according to the NRF.7

Of course, it isn’t just US consumers and supply chain managers who are being impacted. “Worries over higher tariffs are a global concern.”, according to Hackett Associates founder Ben Hackett. In collaboration with the NRF, his firm publishes the Global Port Tracker report.

As reported in Chain Store Age, Hackett added, “We are witnessing elections around the world where discontent is leading to inward-looking policies that threaten trade with the almost certain potential for increasing tariffs.” Hackett continued, “In the United States, this is particularly true with the election of Donald Trump. But it is not much different in Europe, with the EU calling for tariffs to be applied to a growing number of products from China.”8

2025 TARIFF UNCERTAINTY: DOES YOUR COMPANY HAVE A TARIFF PLAYBOOK?

Does your company’s supply chain management team have a playbook for tariffs? Many businesses do, according to a recent article published by The Wall Street Journal.9

After experiencing Trump’s first term in office, and surviving the severe supply chain disruptions at the peak of the pandemic, many business leaders developed plans to diversify their supply chains from a single source. Those plans drove the much publicized nearshoring and reshoring trends in North America. In addition, the supplier diversification movement sparked manufacturing growth in Vietnam, South Korea, India, Indonesia, and Malaysia.10

Today, your playbook may include or expand upon these diversification tactics. According to a recent article from Supply Chain Dive, “Stanley Black & Decker has been planning for the possibility of a change to U.S. tariff policies since the spring by running through various scenarios a new administration could enact.”

The toolmaker’s tariff-mitigation plans include the possibility of moving production and other aspects of its supply chain from China to other countries in Asia or possibly Mexico.11

Of course, creating a playbook would be easier if we all had clarity on what actual tariffs will be assessed.

At various times, Trump has called for across-the-board tariffs of 10%. But he has also suggested 10% to 20% blanket tariffs on various occasions. Once he voiced figures as high as 50% to 200%. On multiple occasions, he has proposed a tariff of 60% on goods from China. Of note, during his first term, Trump wielded the threat of tariffs to renegotiate trade deals.12

Prior to the election, Trump’s tariff pronouncements were unofficial statements to attract voters. Now, those public declarations can be leveraged as a negotiating tool with US trade partners. A great deal of uncertainty still exists on what reality will look like after inauguration day.

“Until that clarity comes, businesses will have to plan for a variety of scenarios,” Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council, told CNBC.13

Willy Shih, an economist at Harvard Business School provides a useful insight for those developing their playbooks. Per Shih, “Now is the time for them to dissect their supply chains and evaluate where their vulnerabilities to tariffs lie.” He continues, “they need to understand where their exposures are. A lot of times, it’ll be in surprising areas, because your exposure may be at your supplier level. Your tier two supplier may have exposure to tariffs and you may not know, but the first thing you got to do is understand all that.”14

2025 TARIFFS: WINNERS & LOSERS

At the top of the winners list, unfortunately, are Washington lobbyists. Why? American business leaders and trade groups are jockeying for tariff exemptions, also known as exclusions, which will allow a business to avoid paying customs duties on specific goods.

As reported by CNBC, “in corporate America, the race is on to find the right lobbyists to help companies rub shoulders with the right people, to give them an advantage in securing tariff loopholes.”15

Of course, most US companies are small-to-medium sized businesses (SMBs), and they don’t have the same Washington connections. In the short term, SMBs dependent on global supply chains are likely to struggle with the tariffs and subsequently with the transition costs needed to modify their supplier networks.

Even so, some big businesses will also struggle to adjust. For example, “electronics makers may face potentially painful component shortages,” per Dan Abramson, who is the SVP of Growth Markets for Chicago-based FourKites and National Association of Manufacturers Board member.

Whether a company is large or small, Abramson said, “the biggest winners won’t be those who simply move production, but those who use this moment to fundamentally redesign their operations with more flexibility and redundancy built in.”16

Another group of winners will be US manufacturers that cater to the domestic market, especially if their competitors manufacture goods elsewhere. These winners includes companies headquartered overseas who have built production facilities in the US.

On the other hand, US manufacturers that rely heavily on exports may struggle if other countries establish retaliatory tariffs of their own.17

2025 TARIFF UNCERTAINTY: WILL THE MEXICO NEARSHORING BOOM GO BUST?

After years of riding a nearshoring wave that created a huge manufacturing expansion, Mexico seems likely to be on the losing end of Trump’s proposed tariffs. Of course, that will impact the thousands of businesses that now manufacture goods in Mexico for the US market (83% of Mexico’s exports go to the United States).18

Further, in large part due to the USMCA trade agreement that Trump himself brought to fruition, many US businesses now source goods from Mexico.

However, with a change in heart that has the President keen to punish Mexico with tariffs, those same American businesses may face much higher sourcing costs.

At a campaign rally immediately before the election, Trump vowed to reach out to Mexico’s President Claudia Sheinbaum. “I’m going to inform her, on day one or sooner, that if they don’t stop this onslaught of criminals and drugs coming into our country, I am going to immediately impose a 25% tariff on everything they send into the United States of America.”19

If the tariffs on Mexican imports are extensive, it seems likely that businesses on both sides of the border will suffer.

2025 TARIFF UNCERTAINTY: WILL CHINA STRUGGLE UNDER HIGHER TARIFFS?

Other than Mexico, no country has been consistently threatened by Trump with higher tariffs than China. China is now the second-largest US trading partner (after Mexico). So, of course, US tariffs will hurt the Chinese economy.

Yet, China is by far the world’s largest manufacturer of well, nearly everything. That won’t change any time soon. As such, China is one of the largest trading partners of many countries. China has the wherewithal to subsidize many industries to mitigate the risk of losing global market share.

One gets the sense that US tariffs will be a headache for China, but are unlikely to be a full-blown economic crisis.

2025 TARIFFS: WILL TARIFFS PROVIDE A BOOST TO THE US FREIGHT INDUSTRY?

Freight transportation companies are eager for higher demand, so it’s worth asking if the industry will benefit from new tariffs. In fact, Trump’s tariff comments created a post-election investor rally for trucking and railroad stocks and a slump for global shipping carrier stocks.20

However, it’s unlikely the freight industry will see a notable boost, according to Jason Miller, associate professor of supply chain management at Michigan State University and interim chair of the Department of Supply Chain Management. As reported by Commercial Carrier Journal (CCJ), Miller points out that “several academic research findings indicate Trump’s proposed plans will not significantly boost domestic freight demand.”21

Further, a bright spot in the US freight market has been the notable overland influx of goods from Mexico. As mentioned previously, the USA imports more goods from Mexico than any other nation. Because of that, import volume at Port Laredo has often exceeded that of the Port of Los Angeles in the past year. Reducing the flow of goods from Mexico certainly won’t help freight transportation companies fill their excess capacity.

2025 TARIFFS: FREIGHTWAVES CEO CONVEYS A SENSE OF CALM

“Tariffs on retail goods don’t usually directly control the final price that consumers pay.” That’s the view of Craig Fuller, the CEO of FreightWaves.22

Fuller’s insights seem to provide a stark contrast to the NRF narrative. Fuller reminds us that sourcing is not fixed. He believes many retailers will find some combination of absorbing tariffs, finding cheaper suppliers either domestically or in countries with more favorable trade agreements, and as a last resort, passing along some price increases to consumers.

Further, he points out that since the US is the largest consumer market in the world, a drop in demand due to higher prices will incentivize suppliers to reduce their prices. Further, foreign government subsidies may provide assistance to suppliers in many countries.23

Fuller adds another note of reassurance, pointing out that modern supply chains are more flexible, efficient, and resilient than many people realize. Per Fuller, “Over time, sources of supply can be redirected to areas with lower costs and higher reliability.”24

ABOUT SSI

At SSI we transform the complexity of global freight audit into cash savings and supply chain intelligence, providing actionable insights to maximize your profit potential.

  • Customizable solution scales with your growing and dynamic business needs.
  • Automated freight audit drives savings to your bottom line.
  • Fintech platform pays freight invoices in 100+ currencies, at favorable exchange rates.
  • Actionable business intelligence supports your supply chain optimization efforts.
  • Cutting-edge data visualization facilitates your analysis of data and trends.

As mentioned in the opening paragraph of this post, we also offer a variety of parcel, freight and shipping cost-cutting services. Want to learn more? Contact SSI.

Footnotes:
1, 2. Alex Knapp, “Trump Promised To Make Your Medicines Cheaper. His Tariffs Will Make Them More Expensive“. November 14, 2024, as published by Forbes.
3, 5, 20. Lori Ann LaRocco, “State of Freight: Trump vow on new trade war sends shockwaves through supply chain, importers scramble to move up orders“. November 6, 2024, as published by CNBC.
4. Editorial staff, “What’s about to hit the world economy? Trumponomics tees off“. November 14, 2024, as published by The Economist.
6. National Retail Federation, “Global Trade: Tariffs”. Undated, as published by the NRF.
7. Marianne Wilson, “NRF: Trump’s tariffs could cause ‘dramatic’ price hikes; slow consumer spending“. November 6, 2024, as published by Chain Store Age.
8. Marianne Wilson, “Some merchants moving up shipments ahead of possible tariffs and strike“. November 8, 2024, as published by Chain Store Age.
9, 10. Kristin Broughton, Jennifer Williams, and Mark Maurer, “Companies Have a Playbook for Tariffs Under Trump. It Includes Price Increases.”. November 8, 2024, as published by The Wall Street Journal.
11. Kelly Stroh, “Tariffs hikes could be coming. Stanley Black & Decker says it’s ready“. November 4, 2024, as published by Supply Chain Dive.
12. Greg Ip, “A Second Trump Presidency Stands to Radically Remake World Trade“. October 16, 2024, as published by The Wall Street Journal.
13, 15. Rebecca Picciotto and Lora Kolodny, “‘Everyone is calling’: Trump’s tariff threats send U.S. companies scrambling for lobbyists and loopholes“. November 12, 2024, as published by CNBC.
14. Kate Magill, “Trump’s tariffs: How manufacturers can prepare“. November 12, 2024, as published by Supply Chain Dive.
16. Jeff Berman, “Tariffs are top of mind for supply chain stakeholders following Trump’s re-election“. November 7, 2024, as published by Logistics Management.
17, 21. Pamella De Leon, “Will Trump’s tariff policies boost domestic freight?”. November 14, 2024, as published by CCJ.
18, 19. America’s Staff, “Donald Trump is poised to smash Mexico with tariffs“. November 7, 2024, as published by The Economist.
22, 23, 24. Craig Fuller, “Tariffs and retail prices: What consumers need to know“. November 9, 2024, a published by FreightWaves.

SSI blog post entitled: 2025 tariff uncertainty troubles supply chain managers.