The U.S. supply chain is preparing itself for two major potential shifts in early 2025, bracing for new Trump-era tariffs partnered with the possibility of a port strike that could begin in mid-January.
Many supply chain and logistics executives are trying to arrange any supply needs for the new year now in an effort to avoid higher prices or delays, according to a Nov. 19 report from CNBC.
During his campaign, President-elect Donald Trump made several propositions for the economy, including tariffs on foreign-made goods that could make virtually everything made abroad more expensive for Americans.
In an advisory to clients, Honour Lane Shipping predicted that many companies will start frontloading their supply orders in the first half of December.
The earliest that new tariffs could be in effect is in late February or early March, according to the report.
The report also warns of a possible strike by the International Longshoremen’s Association at ports from New England to Texas that could begin in mid-January. Following a three-day ILA strike in October, supply congestion lasted for weeks.
While shippers are interested in front-loading freight, this might not be feasible if suppliers can’t ramp up production.
The global supply chain and U.S. shipper reliance on other countries has expanded over the past 20 years, with the total value of goods imported into the U.S. increasing by 153%.
Some logistics experts believe that Mr. Trump’s economic and international policies could bring another round of restructuring to global supply chains.
There has been a rise in Chinese manufacturing moving to Mexico under terms of the Trump-negotiated USMCA trade deal, which created a legal back door for supplies entering the U.S. without paying tariffs.
Mr. Trump is expected to close this loophole in his second term, according to the report. More companies have also set up shop in countries such as South Korea, Vietnam and Malaysia, which could also face tariff actions.
Mr. Trump has suggested raising tariffs by at least 25%, which could rise to 100% on goods made in Mexico, in his next term.