As reciprocal tariffs against imports from China and Hong Kong fall from 125% to 10% for 90 days as the U.S. and China seek to hash out a trade deal (see 2505120006), so are Southern California port volumes and trans-Pacific freight rates reflected the volatility seen in the trade space.
Although the reciprocal tariff for imported Chinese goods may have fallen to 10% for 90 days (see 2505130074), Flexport trade experts advised companies to not treat this action as if there will be an extension. Doing so will prevent companies from having to ask later whether they will have any in-transit exemptions as the 90-day period ends around Aug. 12, according to Angela Lewis, global head of customs for Flexport.
Given the fast-evolving trade dynamics in the U.S., some suppliers from China have been advising importers to take advantage of delivered duty paid terms -- which is bad advice and can get companies in trouble with CBP, customs consultant Tom Gould said during a May 13 webinar hosted by Revenue Vessel.
Tariff rates above 200% essentially function “as an import ban” for some members of the American Apparel and Footwear Association because, at that price point, “companies don’t ship, they don’t import, they don’t make, they don’t buy,” the trade association’s head said on the Trade Guys podcast April 29.
Recent U.S. trade actions, such as the IEEPA tariffs on China, Canada and Mexico, the Section 232 tariffs on steel and aluminum derivatives, and the temporarily paused reciprocal tariffs on dozens of countries worldwide, could cause global container volumes to slump by 1% in 2025, according to U.K-based maritime shipping advisory firm Drewry.
With so much uncertainty occurring with U.S. import regulations, companies should develop multiple strategies that address potentially different tariff outcomes, with some strategies being deployed in the short-term and others being deployed further down the road as the geopolitical situation becomes more clear, according to trade experts with professional services firm KPMG.
More and more companies are requesting bonds that are worth millions of dollars and even "up to the billions at this point" as importers seek to ensure they have enough bonding to cover anticipated higher duties, Patrice Lafayette of Roanoke Insurance Group said during an April 23 webinar on tariffs hosted by Flexport.
Although the number of entry summaries processed by CBP in March slightly rose compared with amounts in January and February this year and March 2024, the amount of identified estimated duties nearly doubled, according to releases from the agency.
Several trade groups representing shippers, the maritime industry and U.S. ports criticized the Office of the U.S. Trade Representative's Section 301 determination last week calling for a phased-in approach to levy fees on foreign-built vessels and car-carrying vessels docking at U.S. ports as part of a broader push to build and bolster an American shipbuilding industry (see 2504180018).
A leaked draft document describing possible budgeting plans of the Department of Health and Human Services also mentions absorbing the Consumer Product Safety Commission, according to trade groups.