Donald Trump’s Tariff Increases – What It Means for the Freight Industry

On Wednesday 2nd April 2025, US President Donald Trump outlined his plans to increase tariffs on imports from a number of nations. But, what are the tariff increases, what countries are affected, and what exactly does this mean for you? Let’s unpack Trump’s tariff announcement.

What Are the Tariff Increases?

A 10% baseline tariff on goods from the United Kingdom, Australia, Brazil, UAE, Saudi Arabia and more, will be in full effect from 5th April 2025. This means companies in the United States will now have to pay 10% more for their foreign goods in tax to the US government. Trump has also introduced a flat 25% tariff on all foreign automobiles which has already come into effect as of 5 AM UK time on 3rd April. As a result, critics fear this increase in cost will result in the consumers fitting the bill. 

Furthermore, Trump has outlined his ‘worst offenders’ for the nations who charge higher tariffs on US goods. The vital trading partners hit by these new tariff rates include:

• The European Union – 20%
• China – 54% (in addition to tariffs already imposed)
• Japan – 24%
• Taiwan – 32%

The United States imported $165 billion worth of Chinese goods in 2023. Therefore, it is clear that this will have a significant impact on the price of Chinese goods for American consumers.

Trump has placed no additional tariffs on Canadian and Mexican goods.

Tariff Timings: Overview

Steel and Aluminium Tariffs

Came into effect on 12th March 2025 at 12:01 AM EDT

Rate: 25% on all steel and aluminum imports

Under Section 232, these tariffs apply globally without exemptions and are assessed independently of other tariffs. Not subject to reciprocal tariffs.

Automobile Tariffs

Effective as of 3rd April 2025 at 12:01 AM EDT

Rate: 25% on all foreign-made automobiles

This tariff applies globally to imported vehicles, while other automotive components will increase as of May 3, 2025 (refer to Federal Register for details). Not subject to reciprocal tariffs.

Universal Import Tariff

Comes into effect 5th April 2025 at 12:01 AM EDT

Rate: 10% on all imported goods into the U.S.

This baseline tariff applies to all imports, regardless of country of origin. All imports will be subject to the universal baseline tariff of 10% OR a reciprocal tariff as defined below.

Reciprocal Tariffs

Effective as of 9th April 2025 at 12:01 AM EDT

This tariff applies to imports from countries with significant trade imbalances with the U.S.

Canada and Mexico (USMCA)

USMCA-Compliant Goods: Tariff: 0%. Goods that meet the United States-Mexico-Canada Agreement (USMCA) standards remain exempt from these new tariffs. Tariffs on automobile parts from USMCA countries are temporarily exempt but are expected to be fully implemented by May 3, 2025.

Non-USMCA-Compliant Goods: Tariff: 25%. Goods not meeting USMCA standards, including automobiles, are subject to this tariff.

Non-Compliant Energy & Potash Imports: Tariff: 10%. This is specific to energy and potash imports that do not meet compliance standards.

What is the Long-Term Plan? 

Trump hopes the increase in tariffs will encourage foreign companies to begin moving their manufacturing processes to the United States, resulting in them no longer needing to pay the tariffs and fuelling the American economy as a result.

Pros

• New jobs will be generated 
• More money will be injected into the economy
• Consumers aren’t passed on the extra cost as a result of these tariffs.

Cons

• It takes a very long time to start manufacturing in a new country
• The labour cost in America is very expensive so companies may prefer to foot the tariff bill.

The true effects of these tariff increases will only become clear with time and it remains to be seen how other countries will respond to this announcement.

Understanding these tariffs is vital when it comes to international shipping. At KG Logistics, we offer professional guidance on tariff structures as well as the freight industry as a whole. Our freight forwarding experts can help you understand these new tariff increases and ship your cargo as seamlessly as possible. Contact us today for professional help from our specialist team.