Tariffs Could Have Major Implications for Trucking

President Donald Trump on March 4 implemented his long-threatened 25% tariffs on goods being imported from Canada and Mexico, a move that trucking experts said could have major implications for the industry and across supply chains.

“Supply chain leaders will need to remain agile to adapt to fluctuating prices and changing demand,” said Jenna Slagle, senior data analyst at Project44, immediately prior to the tariffs starting. “The additional costs will likely trickle down to consumers and contribute to inflation among the United States.” She added, “It remains unclear the long-term impact they will have on global trade, especially if they persist for a long period of time.”

Trump originally intended a slate of tariffs directed at Canada and Mexico to take effect just days after signing a Feb. 1 executive order, but delayed them for a month after the three countries negotiated a temporary pause with some concessions.

The North American tariffs are part of a broader White House effort to secure what it views as more favorable trade deals across the board. Canada and Mexico are routinely among the United States’ top trading partners — alongside China — so the tariffs are expected to have a major impact on trade and the economy. The new tariffs on Canada come with a 10% carve-out for energy imports.

25% tariffs on Mexico & Canada + the 10% tariffs that are already in effect on China, could cost the typical American household more than $1,200 per year—& this analysis doesn’t include the additional 10% on China recently announced. #PIIECharts
More: https://t.co/hAgFwihcYw pic.twitter.com/QbOvTTXquL

— Peterson Institute (@PIIE) March 4, 2025

China on Feb. 4 was hit with an additional 10% tariff on all imports. A 25% tariff on steel and aluminum imports from any country is set to take effect March 12.

Slagle noted that ripple effects of the tariffs will likely be felt across business sectors given the volume of freight that will be affected.

“While the plan for these proposed tariffs feels unpredictable, companies need to prepare for all possible outcomes,” she said. Specific to over-the-road trucking, Slagle said carriers should prepare for shifts in freight volume and be prepared to make route adjustments. She also stressed that fleets should brace for border delays and increased operating costs.

Notably, she pointed out that shippers moved goods in anticipation of the tariffs taking effect.

“From Canada, there was a 10% uptick of imports last week in order to mitigate tariff impacts if they [did] go into place on March 4 as planned,” she said, adding that this type of strategic planning can help both carriers and shippers manage uncertainty.

“Implementing a disruption plan and putting the proper tools in place will enable leaders to adapt quickly to changing policies,” Slagle said.

For consumers, those shifts threaten to take a toll. The Tax Policy Center estimates that annual after-tax income for households would fall by $930 on average in 2026 from the tariffs on Mexico and Canada. The Peterson Institute for International Economics estimated that the Canada, Mexico and China tariffs combined will inflict an additional $1,200 annual tax burden on the typical U.S. household. Supply chain visibility specialists Project 44 noted that those three countries collectively account for over 50% of U.S. exports by volume.

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Zuppo 

The Office of the United States Trade Representative said total goods traded with Canada reached an estimated $762.1 billion in 2024, while total trade from Mexico reached $839.9 billion during the same time. Mexico in particular has been seeing increased activity amid an ongoing push toward nearshoring, noted Russell Zuppo, vice president of consulting services at Uber Freight.

“Some U.S. companies that have already invested in nearshoring their production to Mexico are reassessing the immediacy of those plans as they wait to see what the impact of the tariffs will be,” he said. “However, most shippers are not pausing nearshoring plans entirely, and those who have invested in both Mexico and the U.S. might be better positioned to respond to changing trade policies.”

Zuppo recommended that shippers evaluate tariffs’ cost implications and develop contingency plans through scenario planning that aligns inventory positioning with manufacturing capacity. He stressed that it’s essential for businesses to have this level of visibility into their supply chains so they’re prepared to adjust quickly for components that are coming from tariff-impacted regions.

“This would include reviewing and analyzing independent inventory storage, assembly and manufacturing locations across different scenarios,” Zuppo said. “Having a digital twin or network model on hand allows shippers to run ‘what if’ scenarios. This is essential for quickly assessing the impact of new tariffs and adjusting sourcing and inventory strategies accordingly.”

FourKites principal solutions consultant manager Stephen Dyke said e-commerce retailers and direct-to-consumer brands that have relied on drop-shipping items directly from overseas will likely pivot to bulk importing. However, he warned this could increase operational costs while reducing the competitive advantage of ultra-low-cost retailers.

“While proponents argue these changes level the playing field for domestic sellers, the transition will require companies to invest in advanced documentation systems, consider enrollment in trusted trader programs, and potentially redesign their distribution networks to maintain efficiency under the new regulatory framework,” Dyke said.

He also noted that the elimination of the so-called $800 de minimis threshold — the value at which imported goods since 2015 have been permitted to enter the U.S. without duties or taxes — will “fundamentally reshape cross-border trade, forcing importers to navigate full customs clearance for over 1.3 billion shipments annually that previously entered duty-free with minimal formalities.”

Dyke added, “This change would add administrative costs per shipment and create significant delays at ports of entry as customs officials process a surge of formerly exempt parcels.”