We want to provide a brief update on global developments currently impacting our supply chain.
Tariff Update
The U.S. Court of International Trade and multiple state governments are challenging the administration’s authority to impose reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). Due to this legal challenge, an administrative stay has extended the current 10% tariffs until June 16th. If the challenge is unsuccessful, the original pause date of July 9th could be reinstated. Alternatively, the administration may choose to implement new country-specific tariffs at the previously proposed full rates.
Regarding imports from India, a U.S. trade delegation has extended its stay in New Delhi to continue negotiations. There is optimism that a long-term agreement may soon be reached and that the reciprocal tariff could be lifted.
Freight Update
Initial tariff announcements led to a surge in exports from China ahead of the April 5th deadline, resulting in vessel and container rerouting. Once tariffs took effect, export volumes dropped, and carriers removed capacity. Now, with the temporary pause in tariffs, export demand has risen again, tightening capacity and driving up rates. As a result, General Rate Increases (GRIs) of $1,500–$2,000 per 40’ container have been announced. Additionally, Peak Season Surcharges (PSS) are expected soon. These combined increases could result in freight rates rising over 75% from recent lows.
We are monitoring these developments closely and will continue to provide updates as needed. If you have any questions about how these changes may impact your business directly, please reach out to your sales representative.