Introduction

In the process of global economic integration, changes in international trade policies have a profound impact on the international freight industry. During Trump’s tenure, he implemented a series of Trump Tariff policies with strong protectionist overtones. Against the backdrop of the China-US trade war, these Trump Tariff policies not only disrupted the bilateral trade relations between China and the US but also had a huge impact on the pattern of the international freight market.

It is of great significance to explore in depth the impact of Trump Tariff policies on international freight and study the coping strategies for international freight operations to ensure the stable development of the freight industry in a complex and volatile international trade environment influenced by Trump Tariff measures.

The Main Contents and Implementation of Trump Tariff Policies

Tariffs Imposed on Chinese Goods

The Trump administration repeatedly announced hefty tariffs on Chinese goods exported to the US. Starting from 2018, it gradually imposed tariffs ranging from 10% to 25% on a large number of Chinese commodity categories, such as mechanical and electrical products, textiles, furniture, etc. These Trump Tariff policies targeted commodities covered a wide range, involving almost all major areas of Chinese exports to the US, severely affecting the scale and structure of trade between the two countries. These Trump Tariff impositions were a significant part of the overall protectionist agenda during that period.

Tariff Measures Against Other Countries and Regions

Besides targeting China, the Trump administration also took tariff actions against neighboring countries like Canada and Mexico. For example, it announced tariffs on some imported goods from Mexico and Canada. Although some of these tariffs were postponed or exempted later, the policy uncertainty caused by Trump Tariff policies led to fluctuating impacts on relevant trade. In addition, Trump also threatened to impose tariffs on imported goods from major trading partners such as the European Union and Japan.

For instance, he threatened to levy a 25% tariff on EU car imports, triggering trade tensions globally, and countries took corresponding measures to cope with possible trade shocks brought about by these Trump Tariff threats. The overall international trade landscape was disrupted by these Trump Tariff measures, which had a cascading effect on various economic sectors including international freight.

The Impact of Trump Tariff Policies on International Freight

Increase in Freight Costs

1. Direct Tariff Cost Pass-through: The imposition of Trump Tariff policies led to a significant increase in the cost of imported and exported goods. To relieve their own cost pressures, shippers often passed part of the tariff costs onto freight companies. For example, due to the increased cost of Chinese goods exported to the US because of Trump Tariffs, shippers might ask freight companies to limit freight rate increases, or freight companies might have to share the tariff costs with shippers, resulting in compressed profit margins. The burden of these Trump Tariff costs was a major concern for all parties involved in the international freight chain.
2. Cost of Transport Route Adjustment: To avoid high Trump Tariffs, some shippers chose to change their transport routes. Goods that were originally shipped directly to the US might need to be transshipped via other countries or regions first and then transported to the US. This not only increased transportation time but also involved additional loading, unloading, storage, and transshipment costs. For example, some goods shipped from China to the East Coast of the US might be first transported to Mexico and then enter the US by land. The intermodal connections and additional operational procedures in this process increased freight costs as a direct consequence of trying to navigate around the Trump Tariff barriers.
3. Fuel Cost Fluctuations: The trade frictions triggered by Trump Tariff policies increased global economic uncertainty, leading to frequent fluctuations in oil market prices. The international freight industry is highly dependent on fuel, and the instability of oil prices made it difficult for freight companies to accurately estimate fuel costs, adding to the difficulty of operating cost management. For example, when trade tensions intensified due to Trump Tariff escalations, oil prices might surge due to market expectations, resulting in a significant increase in fuel expenditures for freight companies. These cost fluctuations were a direct result of the disruptions caused by Trump Tariff policies in the global economic order.

Fluctuations in Freight Demand

1. Decline in Demand Due to Reduced Trade Volume: High Trump Tariffs led to a significant decline in trade volume between China and the US. Chinese export enterprises to the US saw a decrease in orders due to rising costs, and correspondingly, the demand for international freight also declined. For example, under the impact of Trump Tariffs, Chinese furniture export enterprises experienced a sharp reduction in orders from the US, and the container freight demand for transporting furniture was severely contracted. The business volume of many freight companies was seriously affected as a direct outcome of these Trump Tariff-induced trade volume reductions.
2. Demand Changes Brought About by Trade Diversion: To avoid tariff barriers set by Trump Tariff policies, some enterprises shifted their production and procurement to other countries and regions, which led to changes in the flow direction of international freight demand. For example, some enterprises that originally purchased goods from China for export to the US began to shift their procurement to Southeast Asian countries such as Vietnam and India, resulting in an increase in the freight export demand of these countries and a decrease in the relevant freight demand of China.

Adjustments in Freight Routes and Logistics Layout

1. Imbalanced Cargo Volume on Main Routes: The main freight routes between China and the US were most obviously affected by Trump Tariff policies. Due to the reduction in trade volume caused by these Trump Tariffs, the cargo volume on some direct China-US shipping routes declined, and the utilization rate of ship berths decreased. Conversely, the cargo volume on some transshipment routes or routes to alternative trading countries increased. For example, the freight demand on routes from China to Mexico and from China to Vietnam showed an upward trend under the impact of Trump Tariffs, while the cargo volume on the China-US West Coast route slowed down or even turned negative. Freight companies had to reallocate their route resources in response to these changes brought about by Trump Tariff policies.
2. Changes in Logistics Hubs and Nodes: To adapt to trade diversion and transport route adjustments due to Trump Tariff policies, international logistics hubs and nodes also changed. Some ports that were originally important logistics hubs for China-US trade, such as the Port of Long Beach in the US and the Port of Shanghai in China, saw a slowdown in cargo throughput growth. Meanwhile, some emerging logistics hubs, such as the Port of Manzanillo in Mexico and the Port of Ho Chi Minh in Vietnam, became increasingly important due to the increased demand for cargo transshipment brought about by trade diversion as a result of Trump Tariffs. Freight enterprises need to re-evaluate and layout their resource investments in different logistics hubs, including warehousing facilities, transshipment equipment, and human resources allocation, to deal with the new landscape shaped by Trump Tariff policies.

Coping Strategies for International Freight Operations

Optimizing Supply Chain Management

1. Diversified Procurement and Production Layout: Freight companies can assist shippers in optimizing their supply chains and suggest adopting diversified procurement and production layout strategies. Shippers can search for more suppliers and production bases globally to avoid over-reliance on a single country or region. This approach can help mitigate the negative impacts of Trump Tariff policies. For example, Chinese export enterprises could be encouraged to establish production bases or increase procurement shares in Southeast Asia and Africa. This could effectively reduce trade risks brought about by Trump Tariff policies and ensure the stability of freight companies’ business volume.
2. Enhancing Supply Chain Information Sharing and Collaboration: Establish an efficient supply chain information sharing platform to enable real-time information sharing among all links of the supply chain, including shippers, freight companies, freight forwarders, and warehousing enterprises. Through big data analysis and prediction technologies, understand changes in market demand and trade policy dynamics in advance to adjust transportation plans and resource allocation in a timely manner. By being more informed, freight companies can better adapt to the uncertainties caused by Trump Tariff policies. For example, freight companies could arrange transportation capacity in advance based on shippers’ production plans and order situations to avoid transportation delays or resource waste caused by information blockages, especially in the context of fluctuating trade policies due to Trump Tariffs.
3. Optimizing Inventory Management: Assist shippers in optimizing inventory management strategies and adopting more flexible inventory control methods. By reasonably adjusting inventory levels, reduce the risk of inventory backlogs caused by tariff fluctuations and trade uncertainties brought about by Trump Tariff policies. For example, adopting the JIT (Just-In-Time) production model to adjust production and transportation plans in real-time according to market demand, reducing inventory costs while improving the responsiveness of the supply chain in the face of the disruptions caused by Trump Tariffs.

Expanding Markets and Diversifying Businesses

1. Developing Freight Business in Emerging Markets: Actively explore freight business in emerging markets, such as countries along the Belt and Road Initiative, Africa, and South America. These regions have rapid economic development and huge trade potential, and are less directly affected by Trump Tariff policies. Freight companies can increase their marketing efforts in these regions, establish local service networks, and provide customized freight solutions to attract more customers. By doing so, they can reduce their exposure to the negative impacts of Trump Tariff policies on traditional trade routes. For example, open multimodal transport lines from China to inland African countries to provide equipment transportation services for local infrastructure construction projects.
2. Expanding Value-Added Services: Besides traditional freight services, freight companies should expand into value-added service areas, such as providing cargo insurance, supply chain finance, customs declaration and inspection agency services, customized cargo packaging, etc. By increasing the added value of services, improve customer satisfaction and loyalty, and at the same time, increase the company’s sources of income. This diversification can help freight companies withstand the economic pressures caused by Trump Tariff policies. For example, provide supply chain finance services for small and medium-sized enterprise customers to help them solve the problem of capital turnover, thereby establishing a closer cooperative relationship.
3. Launching Cross-Border E-commerce Logistics Business: With the rapid development of global cross-border e-commerce, freight companies should seize the opportunity to actively develop cross-border e-commerce logistics business. Cross-border e-commerce logistics has the characteristics of small batches, multiple batches, and high time efficiency requirements, which is different from traditional freight business. Freight enterprises need to establish an operation mode that meets the needs of cross-border e-commerce logistics, such as optimizing warehousing management, providing fast delivery services, and establishing overseas warehouses. By venturing into this new area, freight companies can find new growth points and reduce their dependence on the markets affected by Trump Tariff policies. For example, establish overseas warehouses in the target market to achieve local storage and distribution of goods, improve the customer shopping experience, and at the same time, reduce transportation costs and shorten the delivery time.

Improving Operational Efficiency and Reducing Costs

1. Optimizing Transport Routes and Modes: Utilize advanced logistics technologies and data analysis tools to optimize transport routes. Comprehensively consider factors such as transportation costs, transportation time, and tariff policies, especially those related to Trump Tariff policies, and select the most economical and efficient transport routes and modes. For example, by comparing the costs and time efficiencies of sea freight, air freight, land freight, and multimodal transport, provide customers with the best transport solutions. At the same time, reasonably plan the ship routes, improve the utilization rate of ship berths, and reduce the unit transportation cost, thereby making the business more resilient to the cost increases caused by Trump Tariff policies.
2. Increasing the Intelligence Level of Logistics Facilities and Equipment: Increase investment in the intelligent transformation of logistics facilities and equipment to improve the automation and intelligence levels of logistics operations. For example, introduce automated loading and unloading equipment and intelligent warehousing management systems, etc., to improve the efficiency of cargo loading, unloading, and storage, and reduce labor costs and operational errors. Through intelligent logistics equipment and systems, real-time monitoring and management of the entire process of cargo transportation can be achieved, and the quality of logistics services can be improved. This can help freight companies operate more efficiently and reduce costs in the context of the economic challenges posed by Trump Tariff policies.
3. Strengthening Cooperation and Alliances Among Enterprises: Freight companies can establish strategic partnerships or join industry alliances to achieve resource sharing and complementary advantages. By cooperating to jointly purchase fuel, lease transportation equipment, etc., the procurement cost can be reduced. At the same time, cooperate in route operation, market expansion, etc., and jointly deal with market competition and policy risks, especially those associated with Trump Tariff policies. For example, several freight enterprises jointly open up new routes, jointly bear the operation costs and risks, and improve the competitiveness and stability of the routes, enabling them to better navigate the market affected by Trump Tariff policies.

Conclusion

Against the backdrop of the China-US trade war, Trump Tariff policies have brought numerous challenges to the international freight industry, including rising freight costs, demand fluctuations, and adjustments in freight routes and logistics layout. However, international freight enterprises can seek development opportunities in a complex trade environment through a series of coping strategies such as optimizing supply chain management, expanding markets and diversifying businesses, and improving operational efficiency and reducing costs. In the future, with the continuous changes in the international trade situation, freight enterprises need to continuously pay attention to policy dynamics, especially those related to Trump Tariff policies and any potential successors or similar trade policies, flexibly adjust their business strategies, adapt to the new changes in the global trade pattern, and achieve sustainable development.