2025: A year of converging market influences

President-elect Trump’s plan to impose higher tariffs on imports from Canada, Mexico, and various Asian countries, including China, is one of many changes to plan for in the weeks and months ahead.

Now is a pivotal moment for buyers and suppliers to methodically forecast future demand and determine the best strategies to mitigate additional costs and potential delays. The chart below shows a brief window of opportunity before mid-January to capitalize on established duty rates and shifts in routing options.

Impact of proposed trade tariffs

The proposed tariffs apply tax increases on all products from Canada and Mexico. The stated goal of these tariffs is to address illegal immigration and drug trafficking. For China, an increase in tariffs on all goods is being considered, with potential increases up to 60% on specific products to curb drug flow and trade imbalances. Other Asian countries may incur increases as well. These measures are expected to reshape international trade dynamics and have far-reaching economic consequences.

Proposed tariff increases

The impact of these tariffs will be felt across various sectors. If these tariffs are implemented, key commodities such as automobiles, electronics, alcohol, and agricultural products are likely to see significant cost increases.

For instance, the automotive industry, heavily reliant on parts from Canada and Mexico, could face higher production costs, leading to more expensive vehicles for consumers. Similarly, electronics and consumer goods from China and other Asian countries will become pricier, affecting everything from smartphones to household appliances.

Some of the largest beer manufacturers in the United States produce key brands in Mexico and import them, which could put pressure to find cost cutting opportunities or increase prices. The agricultural sector, particularly in the Midwest, may also be subjected to retaliatory tariffs from affected countries that could reduce export opportunities for American farmers.

Increased tariffs are not unique to the United States. For example, the European Union recently implemented a 35.5% tariff on imported electric vehicles from China. Since more than half the world held major elections in 2024, it’s likely more global trade changes are on the horizon with incoming leadership.

Labor challenges

The continuation of increased labor unrest experienced in 2024 briefly impacted the first weeks of 2025. While there are other labor contracts set for negotiation in 2025 within the transportation industry and across others, these will likely not pose as large of a threat to supply chains as the U.S. Port strike that was just avoided.

The International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) have reached a new labor agreement, avoiding a strike. Buyers and suppliers that adjusted routing to utilize the U.S. West Coast to avoid potential strike-related delays will now be deciding whether to keep cargo moving through the USWC or return to the U.S. East Coast. Even if you have not made the decision to re-route, anticipate continued congestion on the West Coast until equipment levels even out.

While January import volumes are typically lower than during peak season months, like October, there is likely to be a recalibration period while buyers/sellers update strategies.

Evaluating remaining factors

The dissolution of the 2M Alliance between Maersk and MSC marks a significant shift in global shipping dynamics. This breakup paves the way for the forthcoming Gemini Cooperation, a new alliance between Maersk and Hapag-Lloyd, set to begin in February 2025. The Gemini Cooperation is publicly promising many benefits, including more predictable shipping schedules and a stronger focus on sustainability, helping decarbonize supply chains.

This change will alter current export practices by potentially reducing transit times and improving service reliability. This event—and the other alliance changes planned for 2025—offer an opportunity to diversify shipping providers and leverage the improved schedule reliability offered by new alliances.

The 2M Alliance is publicly promising many benefits, including more predictable shipping schedules and a stronger focus on sustainability, helping decarbonize supply chains.

Finally, it is important to remain mindful of the upcoming Lunar New Year, which runs from January 29 to February 12, 2025. Any endeavors to pull forward cargo will require an ability to ramp up production prior to the holiday observation to meet booking dates, as well as factor in seasonal slowdowns and shutdowns.

Tips for adapting to market dynamics

Pull freight forward early

To mitigate the impact of proposed tariffs, buyers are advised to consider options to pull forward any orders before the tariffs take effect. While this means potentially impacting current cash flow, accelerating purchase timelines to stock up on goods at current prices can help postpone the anticipated price hikes. Review supply chains and inventory levels in collaboration with finance teams to identify opportunities to place larger orders now and build a buffer against future cost increases.

Work with trade policy experts

For industries that do not allow for pulling inventory forward, work with customs brokers and trade policy consultants to identify best outcome scenarios for network and business needs.

Explore alternative suppliers

Additionally, exploring alternative suppliers in countries not affected by rising tariffs could help maintain cost efficiency.

For many, supplier diversification started during the COVID-19 pandemic. In fact, in the Trans-Pacific lane, Chinese imported goods to the United States decreased 8% from 2017 to 2023. During that same time, other countries in Southeast Asia, Mexico, Canada, India, and even some European countries have increased almost equally across the board.

It’s clear supply chains are shifting to optimize resilience. Expect that trend to continue.

By considering these and other proactive steps, buyers can better navigate the economic challenges posed by the new tariffs. For additional insights about what to expect for global supply chains in 2025, visit our recent blog post, “Events and Trends Influencing Global Supply Chains in 2025.”

C.H. Robinson has years of experience helping shippers navigate these trade complexities. Contact your C.H. Robinson account team or connect with our experts today. 

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