US importers are “being put in an impossible situation” – to ship or not to ship – as uncertainty about tomorrow’s mass-tariff implementation mounts.
At the end of last week, China announced that from 10 April it would retaliate against the US’s 34% ‘reciprocal’ tariff and hit US goods with its own 34% tariff.
While this isn’t equal to the full 54% tariff rate to which Chinese imports into the US are now subject, China also imposed export restrictions on critical minerals for the defence, hi-tech and clean energy industries upon which the US is heavily reliant.
Yesterday afternoon, President Trump, on social media platform Truth Social, said: “If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow, the US will impose additional tariffs on China of 50%, effective 9 April.”
This would mean that from tomorrow, US importers could be facing a 104% tariff on Chinese goods.
At the recent TPM25 by S&P Global, CEO of Trade Force Multiplier Cindy Allen highlighted that the US president’s “tweet and implement” strategy prohibited stakeholders’ “normal paths of communication through congressional representatives and contacts at different agencies”.
“They are simply not able to influence a correction. There is not that realistic approach to implementation that you would have if you had an engaged agency head or agencies that can discuss with the White House. It’s very much driven by a small group of individuals,” Ms Allen explained.
Mr Trump added that “all talks with China concerning their requested meetings” with the US would be “terminated”. Negotiations with other countries, “which have also requested meetings”, are set to “begin immediately”.
No country has yet been successful in negotiations for reducing the tariffs set to come into force tomorrow. Mr Trump rejected as “not good enough” the EU proposal for a ‘zero for zero’ tariff deal on cars and industrial goods.
Today, EC president Ursula von der Leyen had a telephone conversation with China’s premier, Li Qiang, to “discuss the state of EU-China relations” and “take stock of bilateral and global issues”, according to the commission.
“In response to the widespread disruption caused by the US tariffs, President von der Leyen stressed the responsibility of Europe and China, as two of world’s largest markets, to support a strong reformed trading system, free, fair, and founded on a level playing field,” it said.
Ms von der Leyen called for a negotiated resolution, emphasising the need to avoid further escalation. She highlighted “China’s critical role in addressing possible trade diversion caused by tariffs”, and discussed setting up a mechanism for tracking possible trade diversion and ensuring any developments were “duly addressed”.
Geodis CEO Marie-Christine Lombard said the tariffs were causing “a great deal of uncertainty” for customers’ business, “because they simply don’t have any visibility on what lies ahead”.
“Customs duties in the United States are currently changing from one day to the next on certain goods. So it’s very tough for shippers to calculate their cost price and then work out their selling price,” she explained.
Indeed, with the US administration is set to realise President Trump’s reciprocal tariff threat, with exact duty figures announced just last week, previous revocation of executive orders has left a question mark over what may transpire.
Industry consultant Lars Jensen noted that this had put shippers in “an almost impossible situation”.
“Ship now and risk the tariffs being removed and you are stuck paying the high tariffs for shipping early. Wait, and you risk that tariffs get increased even further,” he said.
Daniel Krassenstein, global supply chain director at Procon Pacifc, said: “Short-term, there is very little we can do. India is our primary sourcing country, due to competitive labour cost and capacity. As we ‘make to order’, we therefore do not have the luxury of front-loading to quickly get an on-board date by 9 April.
“Medium-term we are exploring other sourcing countries, but it is not a quick and easy shift, as other countries have higher labour costs and less capacity. Longer-term, certainly, it would be wise to push some production to other countries (even if we were to break even), so our eggs are not all in one basket. We are attempting to do so,” he concluded.
