Tariff Uncertainty: What to Expect and What You Can Do

Tariffs are once again dominating the headlines, reshaping the global trade landscape with implications that shift almost daily. As of mid-April, businesses navigating international supply chains face mounting uncertainty—new tariffs and trade measures are rapidly evolving, impacting costs, lead times, and strategic planning.

Legacy Supply Chain is closely monitoring these developments, focusing on the immediate realities, near-term consequences, and potential long-term outcomes. For companies reliant on global sourcing and logistics, understanding these dynamics and proactively planning for possible scenarios is now more critical than ever. Here’s what you need to know about the current state of tariffs—and how you can prepare for what’s next.

First, A Quick Summary

As of April 5, imports from all countries are subject to a baseline 10% tariff. And, as of April 11, SupplyChainDive.com offered a summary of the current status of U.S. tariffs for countries around the world:

China

On April 9, The Trump Administration increased reciprocal tariffs on China to 125%. The rate stacks on two previous 10% hikes from the U.S., for a total of 145%, per the White House. In response, China has placed targeted tariffs on numerous agricultural goods as well as cars, equipment and energy imports from the U.S. A 125% duty on all U.S. imports went into effect on April 12. However, the news isn’t all bad—as of April 17, President Trump announced that he has begun talks with China and hopes to have a deal in the next 3-4 weeks.

Canada

The U.S. in March enacted 25% tariffs on goods from Canada, along with a 10% duty on energy imports, except for those that qualify for the US Mexico Canada Agreement (USMCA). Canada has retaliated several times with tariffs on targeted lists of U.S. goods.

Mexico

The U.S. in March enacted 25% tariffs on imports from Mexico, except for those that qualify for the USMCA. Mexico’s President Claudia Sheinbaum has mentioned plans to retaliate, but has instead emphasized negotiating with the U.S. for preferential treatment.

The European Union

The U.S. applied a 20% tariff on imports from the EU on April 9, but implementation was paused by 90 days. Imports from the bloc are subject to a 10% baseline tariff during the pause. Trump has threatened to tax specific products further if the EU retaliates against U.S. tariffs. The EU delayed implementation of measures to counteract U.S. duties by 90 days on April 10. It is important to remember that goods transiting through the USA, but not remaining in the USA—for example from shipping from Mexico with their destination in Canada—will not be affected by tariffs.

Industry Specific Tariffs

• Steel and aluminum imports. In March, the U.S. began levying 25% tariffs on all steel and aluminum imports. Two additional aluminum derivative products (empty aluminum cans and beer) were added to the order, effective April 5.
• Cars and automotive parts. The U.S. began charging a 25% tariff on all foreign-made cars on April 3. Automotive parts will be tariffed at the same rate on May 3. USMCA-compliant parts will be taxed under special rules.

Immediate Implications

Given the significant tariffs on China, the most immediate consequence is the disruption to Chinese imports. Many shipments scheduled to depart or currently in transit have been delayed or cancelled outright, creating significant uncertainty about arrival dates and availability. These disruptions have cascading effects, as companies relying heavily on Chinese-sourced products must quickly identify alternative sourcing strategies or face critical inventory shortages. Moreover, the uncertainty surrounding tariff levels adds complexity to the decisions importers must make in real-time regarding which shipments to proceed with and which to pause.

Production Delays and Cancellations

Given the unpredictability and sudden spike in tariff-related costs, some companies have made the strategic decision to temporarily postpone or scale back their production schedules. Customers are halting or pushing out current bookings and manufacturing timelines, choosing instead to wait out the immediate volatility with the hope of a diplomatic resolution or negotiated settlement. These temporary pauses, while prudent in the short term, can ripple throughout the supply chain—affecting raw material suppliers, logistics providers, warehousing plans, and overall inventory strategy.

Heightened Scrutiny of Freight Costs

As tariff pressures escalate, companies are also placing increased focus on freight expenses, carefully assessing transportation options to mitigate rising costs wherever possible. Customers are likely to scrutinize shipping rates, transit times, and carrier surcharges more closely than ever, potentially reshaping how they prioritize cost-efficiency versus service reliability. This intensified scrutiny could prompt immediate shifts in shipping methods, modes of transport (e.g., ocean versus air), routing, and carrier selection, as businesses seek to contain costs in an already challenging tariff environment.

In this rapidly evolving context, agility, close monitoring, and proactive supply chain management will be essential to navigating these short-term disruptions successfully.

Near-Term Implications

In addition to the immediate disruptions businesses are experiencing, there are several near-term implications as the tariff situation continues to evolve. Over the coming weeks and months, companies should prepare for shifting sourcing strategies, fluctuating transportation capacities, and evolving warehousing dynamics. Here’s what supply chain leaders can expect to see:

Shift to Alternative Manufacturing Countries. Many importers are actively assessing alternative manufacturing locations to circumvent tariffs on Chinese goods. According to the Journal of Commerce, “Chinese exporters facing demand headwinds in the US due to soaring tariffs will likely attempt to dump inventory stocks in other markets, with India widely viewed as a key target.” In addition to India, Malaysia, Mexico, and others in Southeast Asia and Latin America will likely benefit from this shift. While these moves may initially be tactical, driven by the immediate need to offset tariff costs, they could lead to longer-term strategic realignment of global sourcing patterns. Companies exploring such shifts must carefully evaluate lead times, infrastructure quality, political stability, and the logistical complexities involved.

Demand for Steamship Capacity Increases in the Extreme Near-Term. With the 90-day tariff pause ocean carriers are expecting an increase in demand over the coming weeks to advance US orders. However, depending on tariff negotiations, importers may temporarily pause shipments from China and ocean freight demand—particularly on the critical Asia-to-North America trade lane—may decline. This slowdown would free up steamship capacity, which was previously tight, and lead to downward pressure on ocean freight pricing. While reduced rates could offer cost-saving opportunities, businesses must carefully manage shipping schedules and consider how long this price reprieve may last.

Temporary Imbalance in U.S., Canada, and Cross-Border Truck Capacity. Shifts in sourcing and delayed inbound shipments from China will create disruptions across North American trucking networks, resulting in temporary imbalances and volatility in truck capacity. This imbalance will affect both domestic and cross-border transportation services between the U.S., Canada, and Mexico. Trucking companies may initially experience uneven demand—heavy in some regions, light in others—leading to rate fluctuations and potential availability issues. It could take approximately one month, or longer, for trucking capacity and pricing to stabilize and rebalance.

Warehouse Capacity Constraints Due to Inventory Pre-Buying. In anticipation of tariffs, many businesses proactively increased imports, leading to warehouses rapidly filling up across the U.S. This pre-buying strategy may constrain warehouse availability, increase storage costs, and add complexity to inventory management. In the near term, securing additional warehouse space or managing existing inventory more efficiently will become critical priorities for companies seeking to maintain operational flexibility and control costs.

Delayed Impact on U.S. Domestic Transportation. The disruptions caused by tariffs and the resulting supply chain volatility will ripple downstream, affecting U.S. domestic transportation networks approximately 30 days after initial international shipment disruptions. Trucking, rail, intermodal services, and last-mile delivery providers may see fluctuating volumes and capacity issues as inventory flows become irregular. Businesses should expect increased variability in domestic transportation rates and service levels, requiring proactive planning and flexibility in managing their domestic logistics operations.

What You Should Be Thinking About Now

While it might feel like you need a crystal ball to get a handle on the future, there are some key considerations that can help you prepare over the next 90 days:

With ongoing volatility from tariffs reshaping global trade dynamics, companies reliant on international supply chains must proactively manage their strategies to mitigate the impact. Businesses face an immediate need to reassess existing commitments, optimize transportation methods, and carefully evaluate sourcing options to maintain operational resilience. Here’s a detailed overview of critical considerations to help navigate these complex times:

Review Price Commitments to Clients. Companies must closely examine existing contractual price commitments made before the tariffs took effect. These agreements may not have accounted for the significant increases in import costs caused by new tariffs, potentially leading to margin erosion or contractual disputes. Businesses should engage proactively with clients to renegotiate terms or develop mutually acceptable adjustments to manage these unexpected costs.

Prepare for Continued Ocean Freight Volatility. Businesses should anticipate ongoing instability in steamship sailing schedules, with carriers potentially manipulating capacity through measures such as blank sailings (canceled voyages) to artificially sustain higher ocean freight rates. Monitoring carrier announcements closely and maintaining flexibility in booking strategies will help mitigate disruptions and manage transportation costs more effectively.

Evaluate Sourcing Alternatives. To circumvent tariffs, companies should explore sourcing products from alternative regions, particularly leveraging agreements like the USMCA. Goods produced in Canada or Mexico currently enjoy tariff-free status, making these countries increasingly attractive as nearshoring options. Transitioning to new suppliers will require careful evaluation of their production capabilities, lead times, regulatory compliance, and logistics infrastructure to ensure smooth integration into existing supply chains.

Identify Opportunities for Cost Reduction. Given the added financial strain tariffs create, companies should proactively seek cost-saving opportunities elsewhere within their operations. This could include streamlining logistics processes, renegotiating vendor contracts, optimizing inventory levels, improving transportation efficiency, or accelerating digital and automation initiatives to achieve better overall cost management and offset tariff-related expenses.

Consolidate Shipments to FCL. Legacy anticipates a notable reduction in Less-than-Container-Load (LCL) shipping as shippers seek cost efficiencies by consolidating cargo into Full Container Loads (FCL). This shift may initially result in shipments being placed on hold for approximately 2-4 weeks, allowing shippers sufficient time to build full container volumes and renegotiate terms where possible. This approach can significantly reduce overall transportation costs but requires careful inventory planning and proactive communication with stakeholders to avoid operational disruptions.

What To Consider Now

The tariff environment remains extremely volatile, characterized by threats of new tariffs quickly followed by implementation delays. This inconsistency creates confusion and uncertainty for businesses reliant on global supply chains. However, we do have a couple of recommendations for things you can do to be as prepared as possible.

Diversify your sourcing networks. Companies should proactively broaden their sourcing networks by exploring and establishing relationships in new countries. Where possible, consider shifting short-term production to alternative manufacturing locations to avoid tariff impacts.

Delay shipments when feasible. Given the fluidity of the tariff situation, businesses are advised to strategically delay shipments when possible. This allows additional time to gain clarity on tariff policies and avoid unexpected costs.

Finally, DON’T PANIC. There are strategies for dealing with whatever challenges come our way. Give yourself time to consider your options and develop a thoughtful strategy.

Legacy’s Experts Can Help

If you need assistance, Legacy Supply Chain offers a variety of services and a wealth of experience that can inform your supply chain strategy.

• Customs & Compliance. Our in-house Customs Brokers offer specialized guidance on tariff implications, assist with accurate product classification (HTS codes), and advise on potential duty deferral opportunities.
• Transportation Advisory. Legacy acts as a trusted consultant, providing detailed guidance to help shippers navigate complex and evolving transportation issues effectively.

Here are some specific ways that  Legacy Supply Chain can provide support for your business:

• In-Bond Transit from Mexico to Canada. Legacy has successfully managed in-bond shipments from Mexico to Canada, providing an alternative to traditional cross-border transit.
• Foreign Trade Zone (FTZ) Analysis. FTZ options may exist for importers seeking duty deferral, navigating complexities related to IEEPA and Section 232 tariffs.
• Product Classification Solutions. Legacy routinely conducts detailed HTS product classification analyses to ensure accurate compliance and cost management.
• International Transport Consultation. We continuously advise customers on tariff implications, specifically focusing on managing freight and import costs effectively.
• Domestic Transportation Capacity. As capacity becomes more and more volatile across the US and Canada, lane opportunities are becoming evident that can provide shippers with viable options to keep products moving domestically.
• Warehousing and Distribution. Legacy offers flexible short-term warehousing and distribution solutions to manage inventory strategically during times of tariff volatility.

So, What Happens If There Are High Tariffs Long-Term?

Long-term tariffs are poised to significantly reshape U.S. supply chains, introducing both strategic shifts and operational challenges. Some of the potential consequences are:

Permanent Sourcing Realignment. The strategic intent of tariffs is to reposition U.S. manufacturing away from tariffed countries, especially China. This trend has led to increased investments in countries such as India and Mexico. However, for many small businesses, relocating production remains challenging due to higher costs and infrastructure limitations in alternative locations.

Increased Supply Chain Complexity. Diversifying supply sources to multiple countries increases complexity. This would require businesses to manage a variety of regulatory environments, customs processes, and logistics arrangements. This complexity has the potential to lead to higher administrative costs and potential delays in product delivery.

Capacity Constraints and Investment Needs. Shifts in sourcing could strain infrastructure and logistics capacity in emerging manufacturing hubs. For example, increased demand in countries like India or Malaysia may outpace their current infrastructure capabilities, leading to bottlenecks and necessitating significant investments to accommodate the growing trade flows.

Long-term Inventory and Risk Management Changes. Persistent uncertainty around tariffs and international trade policy encourages companies to hold higher levels of safety stock or buffer inventory. This approach ties up capital and storage capacity, potentially leading to increased warehousing costs and more conservative inventory management practices.

In summary, long-term tariffs are likely to drive fundamental changes in U.S. supply chains, necessitating strategic adjustments and proactive risk management by businesses to navigate the evolving trade landscape.

Conclusion

It’s clear that the tariff situation will remain volatile and unpredictable over the next few months — at least. The most important thing is not to panic and act precipitously. Consider your options carefully and consult an expert like Legacy Supply Chain to provide critical expertise that can help you develop the right strategy for your business and your supply chain. To talk to one of our experts, contact us today or email us today at [email protected].

About Legacy Supply Chain

Legacy Supply Chain has been a trusted partner for businesses seeking greater control over their dynamic supply chains for nearly 40 years. With over 30 operations across the United States and Canada, Legacy offers tailored warehousing & distribution, eCommerce fulfillment, and transportation solutions, enabling businesses to deliver exceptional customer experiences.