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Tariffs Back in Turmoil, Reinstating Ocean Capacity, and Preparing for a Flood of Returns

By June 25, 2020 No Comments


Tariffs are back in turmoil this week, as the Trump administration weighs a series of new measures. On Tuesday night, the United States Trade Representative (USTR) filed paperwork to allow companies to comment on tariffs on roughly $7.5 billion of imports from the European Union and U.K. The administration is planning to add goods to the list—adding an additional $3.1 billion worth of European goods—and is also considering increasing existing tariffs to as high as 100%.

Even though the revised North American trade deal, USMCA, goes into effect in just under a week, the Trump administration is preparing to reinstate tariffs on aluminum imports from Canada. Many U.S. trade officials have vocalized concern over this move, fearing retaliation from Canada and a rocky start to the implementation of the new trade deal.

After months of pushing for the use of American-made medical equipment in the fight against COVID-19, the Trump administration is also considering extending its tariffs on Chinese imports to include critical medical supplies. While no official moves have been made yet, massive increases in PPE and medical supplies moving through West Coast ports suggest that importers may be trying to get ahead of any new tariffs.

Don’t forget—the USMCA goes into effect on July 1st. Make sure your business is prepared by reading up on the agreement and its protocols


After months of blanked sailings and capacity cuts, carriers are beginning to reinstate capacity on Trans-Pacific routes. There are still huge numbers of canceled sailings for throughout the third quarter of the year, but after China-West Coast rates saw an 84% year-on-year increase this week, carriers seem to be moving out of survival mode and refocusing on market competition. Projections on carrier profits are being reevaluated as low capacity has enabled carriers to turn back to competing for market share. While the ocean freight industry is guaranteed to suffer a massive loss for the year, these may be signs that carriers are feeling optimistic about the rest of 2020.


Despite the recent uncertainty regarding the flow of air cargo between the U.S. and China, rates have fallen significantly due to a decreased urgent demand for PPE. However, partially due to significant blanked sailings by ocean carriers, air cargo rates are expected to remain at unusually high levels for the summer. 


Rampant blank sailings by ocean carriers have caused issues with equipment return and sporadic gate closures at Los Angeles-Long Beach, and protests for racial and social justice at 29 ports also disrupted the flow of goods with the largest impact being in Seattle-Tacoma. 


Federal grants have been given to both Ohio and Indiana in order to facilitate the development of smart logistics and trucking technologies on the I-70 highway shared by the states. 

Met with significant resistance from owner-operators and many in the trucking industry, the House of Representatives voted to raise mandatory insurance coverage for truck owners from $750,000 to $2,000,000. 

Other News

In the U.S., where restrictions in many states are being eased or eliminatedsurvey data suggests retailers should prepare for heightened demand and a “flood of returns.”

Shutdowns designed to stop the spread of COVID-19 are easing and tightening with little consistency across the globe, and the latest uncertainty has highlighted the need to build resilient and digitally enabled supply chains. If you’re curious about supply chain tech and how it can be an asset to your business, reach out to a Navegate tech expert.