What You Need to Know About The Current Trade War

Following weeks of heavy handed hints from the Trump administration, President Donald Trump announced new reciprocal tariffs on virtually every country. Highlights from the initial announcement include a baseline 10% tariff for 180 countries, a 20% tariff on goods from the European Union, a 34% tariff on Chinese goods, and a 25% tariff on all foreign automobiles. Stocks tumbled in the post-market following the announcement. It is unclear how long Trump intends to keep these tariffs in place or if he will rescind them due to economic pressure.

International governments are choosing different tactics in handling the American president. The European Union is open to negotiation, but has not ruled out adding additional tariffs of their own. China, which is now under an average tariff of 76%, threatened immediate countermeasures if the American tariffs were not lifted. Alternatively, Israel shared that it would proactively cancel all tariffs on U.S. imports before Trump’s press conference on Wednesday, April 2nd. Despite this gesture of goodwill, Israel was still included in the “Liberation Day” tariffs and is rethinking their strategy.

Understanding Reciprocal Tariffs

Tariffs, tariffs, tariffs. While it may seem like that short word recently came out of nowhere, tariffs have been employed by governments for hundreds of years. William McKinley is well-known for his use of the economic policy, specifically the McKinley Tariff of 1890, and Donald Trump put tariffs in place on everything from solar panels and washing machines to raw steel and aluminum during his first term. They can cover a broad range of items, but in short, tariffs are important taxes that countries use to control the price of goods coming in and out of their borders. 

We encourage you to read our recent Q&A with Licensed Customs Broker Kim Cummiskey for more information about the current state of tariffs.

Among the different types of tariffs, reciprocal tariffs are especially important because they help countries manage their trade relationships.

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Reciprocal tariffs are taxes that countries use to respond to tariffs placed on their own goods by another country. This back-and-forth method is often used to push for fairer trade conditions or to protect local jobs from foreign competition. These tariffs have been used for a long time to help countries deal with trade issues.

The framework governing these tariffs is rooted in international trade agreements such as the General Agreement on Tariffs and Trade (GATT). According to the World Trade Organization (WTO), “Tariffs give a price advantage to locally-produced goods over similar goods which are imported, and they raise revenues for governments.” These legal structures aim to regulate and stabilize international trade flows, although countries may still resort to reciprocal tariffs in response to trade disputes.

The Role of Reciprocal Tariffs in International Trade

Countries use reciprocal tariffs for several reasons, like fighting back against unfair trade practices or protecting young local industries from bigger foreign competitors. While these tariffs can keep jobs at home, they can also lead to trade wars. This is when countries keep increasing tariffs against each other, which can make products more expensive and disrupt global trade.

As reported by the BBC, the actual formula for how the Trump administration decided the percentages for the new tariffs is relatively simple. The trade deficit for the U.S. and a partner country was divided by total goods imports from that country. That number was then divided by two, and rounded up to the nearest whole number.

The recent trade disagreements between the U.S. and China show how big of an impact these tariffs can have on the world’s economy. These kinds of disputes can raise prices for shoppers and create problems for businesses around the world, especially those that rely on importing and exporting goods.

Donald Trump has expressed his deep belief in the power of tariffs to stimulate the American economy, despite misgivings by economists and a volatile stock market. This has been a cornerstone of both his administrations with a stated belief “that increasing domestic manufacturing is critical to U.S. national security.” In addition to the commonly accepted tactics of improving American manufacturing power and working to decrease a government deficit, Trump also views tariffs as a way to curb “the flow of fentanyl and illegal migration into the US.” It is clear the current administration views tariffs as a negotiation tool, threatening exceedingly high tariffs in order to increase pressure on chief executives of neighboring countries like Canada and Mexico. 

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Navigating Reciprocal Tariffs in International Shipping

For those in the freight forwarding and international shipping industries, reciprocal tariffs bring both challenges and opportunities. These professionals need to understand the tariffs well because they can change shipping costs and how goods are moved around the world. 

One new change shippers should be mindful of is another executive order signed hours before the tariff announcement, closing the loophole on “de minimis” goods from China and Hong Kong. Shipments under $800 were able to avoid tariffs, a practice that has been in place since 1938 although the amount was quadrupled from a previous limit of $200 during the Obama administration. This exception will officially end on May 2, 2025 at 12:01 AM.

There are several ways businesses can lessen the impact of reciprocal tariffs. One way is to spread out where they get their supplies from, so they’re not too reliant on goods from countries with high tariffs. Having flexible shipping plans that can adapt to new tariffs quickly is key to keeping things running smoothly. Additionally, taking advantage of opportunities like Automated Clearing House (ACH) payments can make a huge difference in cash flow and bottom line.

By understanding these tariffs and how they work, businesses and professionals in shipping can better handle the challenges and opportunities they bring. Staying up-to-date and flexible is crucial in a world where trade rules are always changing. It is important to work with an experienced partner, like SiShips, who can help businesses of all sizes navigate the uncertainty.

Stay Up to Date with Sheltered International

Global economies shift every day. SiShips puts the shipper in control, offering efficient and cost-effective ways to transport your product.

To learn more about our personalized expertise and state-of-the-art software, contact us today.

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What You Need To Know About the State of Tariffs

Licensed Customs Broker Kim Cummiskey Weighs In

As geopolitical tensions fluctuate and trade policies shift unexpectedly, SiShips is here to guide you and your business through the uncharted waters. Kim Cummiskey, a seasoned Licensed Customs Broker at SiShips, who brings twenty six years of experience, unpacks the intricacies of tariffs and their ripple effects from manufacturers to everyday consumers. 

SiShips: Let’s start at the beginning. What is a tariff?

Kim Cummiskey: Tariffs are what you’re paying to customs, to the government. They are taxes on commodities that are coming into the country. Every country has tariffs. It’s just a matter of what percentage they are charging for those foreign commodities to come into their countries.

SiShips: How do tariffs impact different participants (i.e. manufacturer, shipper, local retailer, consumer)?

Kim Cummiskey: Once the price goes up, consumers are likely paying more, because people making the goods have to pay more. It becomes a circle of the parties making the goods to try and keep the costs low by pushing their manufacturers to lower their costs. That way the consumer doesn’t feel too much of the brunt of the increase, but sometimes it is unavoidable and consumers see that increase where manufacturing costs cannot be lowered.

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SiShips: It has been an extremely volatile month for importers and exporters, with President Trump alternately enacting and rolling back tariffs against Canada, Mexico, and China. As an import operations manager, how have you handled these rapidly changing duties?

Kim Cummiskey: For us, we’re sometimes getting the notifications in the morning when they are going actively into the federal register. There are a lot of rumors back and forth, hearsay when Trump threatens certain tariffs, but until it’s in the federal register, it’s not a concrete absolute tariff that is going to be enacted.

We are constantly listening to everything about what is being threatened. We watch continually throughout the day to see what is actually being enacted or revoked, because we’re getting notifications for both. Some updates may be one thing in the morning, and it changes by the time we go home for the day. We’re proactively staying ahead of it as much as we can.

SiShips: Can you foresee how long these tariffs, or the threat of tariffs, might remain in place?

Kim Cummiskey: Short answer, no. We expect this to be ongoing for quite some time. 

SiShips: President Trump has said he believes the United States is being treated unfairly and would like to institute reciprocal tariffs. Are there any goods or industries in particular we should be on the lookout for to be affected by those?

Kim Cummiskey: The specific commodities at the top of the list are steel and aluminum. Currently steel and aluminum has had an additional 25% enacted, no matter the country of origin. 

Canada and Mexico has 25% added for all commodities however there is an exception with the USMCA (United States-Mexico-Canada Agreement). That’s the free trade agreement that has been in place prior. If the goods qualify for that preferential treatment under that free trade agreement, they can still come in as such and are not subject to the 25% that was just enacted. China and Hong Kong have also received 20% for all commodities with a few exceptions that are in place. 

SiShips: In recent days, President Trump has doubled the tariff on Canadian steel and aluminum to 50%, demanding Canada drop their tariff of “250% to 390% on various U.S. dairy products.” 

Kim Cummiskey: All of it’s very fluid. The 25% on aluminum and steel is what actually got enacted and put into the federal register. 

SiShips: Should importers look for other sources of products that have been affected by the tariffs? What are possible alternatives to trade with Canada and Mexico?

Kim Cummiskey: At this point it seems all countries across the board are getting hit with these tariff increases or might be. There are unconfirmed rumors that every country is going to receive an increase come early April. I can’t say for certain, but we’re expecting to see some changes again.  We do have importers that are looking to produce in Vietnam versus China or change to other countries that might not have such high tariffs. 

Canada and Mexico are very fluid and changing, for now, the USMCA is excluding some goods from the extra 25% but this may change again. Moving trade from Canada/Mexico may or may not be a beneficial business decision, depending on the tariff situation for the new chosen country it could end up with similar high additional tariffs. It is unpredictable at this time.

Image courtesy of Kenny Eliason / Unsplash

SiShips: There is a lot of concern with the downturn in the stock market. At the same time, gas prices are the lowest they have been year-over-year since March 2021. How do you see the current economy affecting the spending habits of the average American?

Kim Cummiskey: Well, it’s all going to go back to the question before of where do these costs get passed down to. If the costs of the goods are going up, people are less likely to spend as much. Ultimately the pricing increases get built in somewhere, so you’re still going to be affected by it. 

Now, speaking freight wise, we might see a turn in parties trying to start sourcing goods domestically and locally instead of bringing it in from international providers where you’re being subject to these ever-changing tariffs.  As costs go up, people tighten up on what they’re spending. They might order a little less than what they would normally, focusing mostly on what is absolutely needed and not carrying extra stock on hand.

SiShips: Given all of these tariffs can change in any direction literally overnight, how can people best protect themselves and their business?

Kim Cummiskey: By staying as informed as they can. Here at Sheltered International we are listening to news sources and the media to stay up to date and informed on the topics being discussed. We are reading and investigating, as well, so we can be as knowledgeable about the current situation as possible. You can come to us at Sheltered International if you have any questions.

There are some aspects that are going to affect businesses in the future that people need to start thinking about, like customs bonds. Importers are going to saturate their customs bonds quicker and are going to have to increase those. That is an effect of these ever changing tariffs that is not immediate, but is coming further down the line.

SiShips: If importers are facing cash flow issues from increased duties, do you have any suggestions for importers?

Kim Cummiskey: ACH payments can be extremely helpful in this situation. When businesses set up payments for duties to customs with the ACH (Automated Clearing House), it allots extra time for payments as it’s paid directly to Customs the following month. This allows some extra time so they can be fully prepared for when that duty payment will come out of their account. This process can make a difference for every business. It gives a little bit of breathing room. In some cases, depending on the calendar and when business days fall, cash flow can be extended up to 54 days. 

Stay Up to Date with Sheltered International

Global economies shift every day. SiShips puts the shipper in control, offering efficient and cost-effective ways to transport your product.

To learn more about our personalized expertise and state-of-the-art software, contact us today.

In January, multiple fires burned 40,000 acres in Los Angeles County destroying homes, wrecking entire ecosystems, and ultimately claiming the lives of 29 people. Thanks to the heroic efforts of fire fighters and first responders, the fires have been contained. While the immediate danger is over, the recovery effort of rebuilding homes and communities for fire victims is just beginning.

Sheltered International recently partnered with Settings by Mona, a luxury hospitality linens provider, to aid victims of the devastating natural disaster. This collaboration underscores the impact that thoughtful partnerships can have on disaster relief efforts.

Stepping Up in Times of Need for Fire Victims

When disaster struck in the form of severe fires across Los Angeles, immediate action was required to help those affected. Settings by Mona stepped forward with a significant contribution of essential supplies meant to provide comfort to the fire victims. However, the logistics of getting these supplies from Las Vegas to Los Angeles posed a potential hurdle.

The Role of Sheltered International

At this time, the urgency of the situation was clear. Sheltered International responded by offering complimentary less-than-truckload (LTL) shipping services. This ensures the swift and safe delivery of the donated goods to fire victims. Both sides of the partnership showed their agility and capability in managing logistics for critical relief efforts.

A Heartfelt Collaboration

Subsequently speaking on the partnership, Mona Steck, President of Settings by Mona, shared “We appreciate [the] contribution towards getting these much needed bed linens to all of those who have lost everything. We very much look forward to a continued fruitful partnership with SiShips.”

This initiative is part of Sheltered International’s broader commitment to giving back to the community. “Our role goes beyond basic shipping logistics. It’s about furthering hope and recovery for communities in distress,” commented Andrew Ciccarone, Managing Member and Licensed Customs Broker at Sheltered International.

A Call to Action

Sheltered International continues to encourage other corporations to recognize their power to make a difference. By stepping up in times of disaster, companies can significantly impact recovery efforts, providing not just material assistance but also inspiring hope and resilience in affected communities.

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Trump Administration Enacts Tariffs on Canada, Mexico, and China

The speculation is over. President Donald J. Trump is engaging in a forceful trade war with historical allies and world powers. 

Starting at 12:01AM on Tuesday, February 4, 2025, there will be tariffs on imports from Canada, Mexico, and China. Trump has made it clear he will not be afraid to raise the tariffs further or to place more tariffs on additional countries. UPDATE: FEBRUARY 4, 2025 9:30AM ET. Following productive conversations with Prime Minister Justin Trudeau of Canada and President Claudia Sheinbaum of Mexico, the Trump Tariffs have been put on a thirty day pause. Prime Minister Trudeau agreed to set up a US-Canada task force and move a $1.3 billion plan created in December into an action phase. President Sheinbaum said she would send 10,000 Mexican troops to the border. Meanwhile, China retaliated with duties of their own, including a 15% tax on coal and liquefied natural gas and a 10% tariff on crude oil and vehicles. The Chinese taxes and tariffs will go into effect on February 10.

Trump posted on Truth Social that “We don’t need anything [Canada has]. We have unlimited Energy [sic], should make our own Cars [sic], and have more Lumber [sic] than we can ever use.” However, as many importers, exporters, and regular people learned during the pandemic, it is not a simple matter of untangling the United States from the global supply chain. Another example of the interconnectedness of the global economy is how shipments around the world were affected by a blockage in the Suez Canal. Financial analysts are bracing for falling stocks. Dow futures, S&P 500 futures, and Nasdaq futures fell between 1.3-1.7% on the first day of trading following Trump’s executive order. 

Explaining The New Tariffs

Specific details, including key information about when the tariffs might be lifted, are scant. Here’s what we know:

There will be a 25% tariff on all imports from Mexico. UPDATE: 12PM ET February 3rd. Trump announces he will “immediately pause” Mexico tariffs for one month following a conversation with President Claudia Sheinbaum of Mexico.

There will be a 10% tariff on all imports from China.

There will be a 25% tariff on all imports from Canada, except for a 10% tariff on oil and energy imports.

A few notable exceptions to these tariffs include: international communication (mail, phone calls, etc.), informational materials (film, photographs, artwork, etc.), travel (including personal baggage).

Most importantly, the tariffs do not make room for the de minimis exclusion. This means that there are no tariff exemptions for shipments under $800.

Lastly, if goods are on a vessel or in transit on the final mode of transport by the 12:01AM ET on Saturday, February 1st or have entered a warehouse for consumption before the deadline of 12:01AM ET on Tuesday, February 4th, the goods will not be subject to tariffs.

How Will Americans Be Affected By The Trump Tariffs?

Image courtesy of William William

The President acknowledged that inflation could rise, in contrast with his campaign promises, by saying on Truth Social, “THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!)”

Many people want to know what specific goods could see price spikes due to tariffs.

The biggest sticker shock is likely to be for the auto industry. TD Economics forecasts that car prices will rise about $3,000. “You have engines and car seats and other things that cross the border multiple times before going into a finished vehicle,” said Scott Lincicome, a trade analyst at the libertarian Cato Institute. “You have American parts going to Mexico to be put into vehicles that are then shipped back to the United States.”

Canada is the biggest supplier of crude oil, shipping $90 billion worth in 2024. This is likely the reason for the carve out for energy being 15% less than the overall tariff on America’s northern neighbor. Predictions are less certain in this area, with gas prices forecasted to rise anywhere from 30 cents to 70 cents per gallon.

Another area where consumers can expect to see higher prices is with electronics. This is due to computer chips, integral for everything from cell phones to medical devices to smart home appliances, which are manufactured in China. 

Consumable goods, ranging from Mexican tequila and Canadian whiskey to vegetables, fruits, and nuts, are likely to see higher prices at the grocery store. On the flip side, the governments of Canada and Mexico have said they will respond with tariffs of their own. That means American grown products like soybeans and corn are likely to suffer on international markets.

Will Tariffs Be Lifted Or Are More Coming?

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The stated goal of this wave of tariffs is to curb illegal immigration from Canada and Mexico and stem the tide of fentanyl from Canada, Mexico, and China. The White House says the tariffs will be implemented, “until the crisis is alleviated.” There were an estimated 200,000 illegal or irregular border crossings on the Canadian border in 2024, compared to 2.5 million from the Mexican border. However, there are no benchmarks included from the administration of when they consider the emergency situation resolved.

Buoyed by his success with threatening tariffs on Colombia last week, Trump is confident he will notch several more quick wins. The president has spoken of his admiration of William McKinley, who employed tariffs in 1890 as part of a protectionist strategy for the American economy during the Gilded Age. Not only has Trump said he will install 100% tariffs on the BRICS countries if they try to create their own currency, he has mused that tariffs for the European Union “could definitely happen.”

Many thought Trump was bluffing with all his talk of tariffs. It is no longer a bluff. The best defense for businesses is to stock warehouses as much as possible, especially if they rely on goods from Europe or other BRICS countries like Brazil, Russia, India, and South Africa. 

Stay Up to Date with Sheltered International

Global economies shift every day. SiShips puts the shipper in control, offering efficient and cost-effective ways to transport your product.

To learn more about our personalized expertise and state-of-the-art software designed to keep you ahead of the curve, contact us today.

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What Countries And Materials Might Be Affected

The first week of President Donald J. Trump’s second term has been marked by an avalanche of executive action from the bully pulpit. Trump is looking to make an impact as quickly as possible issuing a flurry of 75, and counting, memorandums, proclamations, and executive orders. The focus is wide-ranging, affecting everything from immigration policy to medical research, as well as socially focused issues such as gender and diversity programs. 

Notably absent from any official documents are the tariffs that Trump made a cornerstone of his campaign. Messaging from the new administration is mixed, with the “Day One” rhetoric removed in favor of February 1st as a new target date for tariff implementation or an even longer delay. It is possible Trump will be lighter on tariffs than expected. The S&P 500, which rose 4% between Election Day and Inauguration Day, has continued to rise each day that goes by without new tariffs.

Colombia Backs Down

Part of the reason for the continued talk, but lack of action, is Trump appears to enjoy the threat of tariffs more than the economic policy itself. 

On Sunday, January 26th, Colombian President Gustavo Petro blocked two U.S. military planes carrying undocumented immigrants from landing. Trump then threatened a 25% tariff on all goods and materials from Colombia in a retaliatory move, with the potential for that number to rise to 50%. This, in turn, led to Petro floating tariffs on U.S. exports. While many Americans consume Colombian oil and coffee, the weight of this was too much for the considerably smaller nation and Petro backed down. A Colombian military plane was sent to San Diego on Monday, January 27th to transport the Colombian citizens that had been deported from the U.S.

Image courtesy of Benoit Debaix

Canada and Mexico Prepare Retaliatory Measures

The tariff tiff with Colombia was a preview of Trump’s intentions with larger countries like Canada and Mexico who he views as treating the U.S. unfairly. Economists are skeptical that Trump will impose his stated tariffs on these allies, comparing it to self-inflicted wound. “The potential for such sizable economic impacts ought to act as enough of a deterrent that Trump will not end up implementing these higher tariffs,” said Matthew Martin, senior U.S. economist with Oxford Economics. For an example of that size, Colombia accounts for 0.5% of U.S. imports; Canada and Mexico combine for 30%.

Chrystia Freeland, a candidate for Prime Minister of Canada, released a list of products worth nearly $140 billion that she would place retaliatory tariffs on. “Being smart means retaliating where it hurts,” Freeland said. “Our counterpunch must be dollar-for-dollar—and it must be precisely and painfully targeted: Florida orange growers, Wisconsin dairy farmers, Michigan dishwasher manufacturers, and much more.”

Image courtesy of Ling Tang

Trump, after pinning inflation on gas prices, is almost certain to raise them with high tariffs on Canada. Kevin Hassett, the Director of the White House National Economic Council, believes domestic production will make up for the deficit. “President Trump is drill, baby, drill, and deregulate and tax cuts and reduce spending.”

China Could Benefit from Trade Wars with Latin America

Lost in the shuffle is the dragon in the east. China, one of Trump’s main targets during his first term, is quietly sitting on the sidelines for the moment. 

Despite being separated by the Pacific Ocean, China trades more with Brazil, Argentina, Chile, and Peru than those countries do with the United States. While Trump’s aggression won the day with Colombia, it is possible that strategy will not prove successful over the next four years. 

Stay Up to Date with Sheltered International

Global economies shift every day. SiShips puts the shipper in control, offering efficient and cost-effective ways to transport your product. 

To learn more about our personalized expertise and state-of-the-art software designed to keep you ahead of the curve, contact us today.

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How Trump’s Tariff Plan Could Affect Importers and Exporters

The global economy is entering a period of significant uncertainty as President-elect Donald Trump prepares to implement his proposed tariff plan in 2025. Designed to protect American industries and reduce trade deficits, the plan includes tariffs on a range of imported goods, from automotive components to agricultural products. While intended to stimulate domestic production, the policy could disrupt global supply chains, raise consumer prices, and provoke retaliatory measures from key trade partners.

For U.S. businesses involved in international trade, understanding the potential ramifications is essential. Importers may face increased costs due to higher import taxes, while exporters risk losing competitiveness in foreign markets. Industries including consumer electronics, in addition to the aforementioned automotive manufacturing and agriculture, are expected to be among the hardest hit.

The proposed changes could reshape international trade by increasing operational expenses, altering sourcing strategies, and driving businesses to explore new markets. Being prepared with strategies to adapt will be essential for maintaining a competitive edge in a rapidly evolving global economy.

Image courtesy of Library of Congress / Unsplash

What is Trump’s Proposed Tariff Plan?

Tariffs are taxes imposed on imported goods. Their purpose is to encourage domestic production by making foreign-made products more expensive. 

While tariffs have not been a major part of international trade for many decades, Trump has previous experience with the economic tool. He signed a tariff on washing machines during his first term. The stated goal was to emphasize American production. Unfortunately, in this specific example, the price of domestic washing machines rose along with the cost of imported washing machines. Additionally, the cost of dryers matched the higher prices of washing machines—an unintended consequence of the tariff. On the positive side, an estimated 1,800 jobs were created in American factories due to the increased demand. It must be assumed that Trump felt the benefits of added jobs outweighed the higher costs for all consumers and wants to expand this economic policy in his second term. 

Throughout the campaign, Trump promoted the potential tariffs heavily but was light on specifics. It appears the target of the tariffs will be on regions where the U.S. has a trade deficit. This includes a stated 25% blanket tariff on all goods from Canada and Mexico and a 10% tariff on all Chinese-made products. At times, the President-elect has referenced some form of tariff on all $3 trillion of U.S. imports.

During a December interview on Meet the Press, Trump said that he cannot guarantee tariffs wouldn’t raise prices for American consumers—an interesting admittance from a candidate who made rising grocery prices a focal point of his campaign. “Some may call it economic nationalism,” Trump told the Economic Club of New York about his tariff plan, “I call it common sense.” 

Importers Will Feel an Impact

Higher tariffs will likely increase costs for U.S. businesses relying on imported materials and products. Companies may face higher operating expenses, forcing them to raise consumer prices, potentially contributing to inflation.

With increased customs inspections and regulatory compliance requirements, supply chains could experience significant delays. Businesses dependent on just-in-time inventory models might be particularly vulnerable. 

An alternative for importers is to diversify sources to regions unaffected by the tariffs. The potential downside here is incurring higher logistics costs. Companies will need to weigh the trade-offs between cost savings and delivery reliability. It is always a good idea to build strong relationships with multiple suppliers—especially now.

How Exporters May Feel the Crunch

It is likely that countries will counter Trump’s tariffs with retaliatory tariffs of their own. This would drive up the prices of U.S. products overseas, and thus reduce demand. Key export destinations may explore alternative suppliers, similar to U.S. importers diversifying their sources. 

Exporters should be proactive ahead of any potential tariffs and work to identify new international markets. By creating more options, exporters can help mitigate losses from traditional trading partners who would be affected by the large tariffs.

Image courtesy of Paul Fiedler / Unsplash

What Industries Are in the Most Danger?

Automotive

The automotive industry, heavily reliant on imported parts, could see price spikes for vehicles and components, affecting manufacturers and consumers alike.

Consumer Electronics

With tariffs on electronics components, tech companies may face reduced profit margins or pass increased costs on to consumers.

Agriculture

Farmers relying on export markets could experience decreased demand and oversupply, driving down prices and threatening profitability.

How Businesses Can Adapt

Adapting to new tariff policies requires a multi-faceted approach focused on cost management, trade compliance, and strategic market expansion. Businesses should begin by optimizing their supply chains through improved forecasting, logistics automation, and better supplier relationships. Investing in technology that enhances inventory management and demand planning can lessen risks stemming from fluctuating import costs.

Exploring alternative suppliers outside tariff-affected regions is another strategy. Establishing long-term contracts with diverse suppliers can reduce dependency on a single source, making the supply chain more resilient to sudden trade policy changes. Importers may also consider nearshoring production to regions with favorable trade agreements. While this tactic can lower transportation costs, the most common countries for U.S. importers to nearshore are two that Trump has singled out by name to receive tariffs on day one.

Lastly, expanding into new international markets can help businesses balance losses. Conducting market research to identify emerging economies with lower trade barriers can open new revenue streams. 

Overall, businesses that proactively implement cost-saving measures, diversify supply chains, ensure compliance, and explore new markets will be better positioned to navigate the challenges posed by shifting trade policies.

How SiShips Gives You the Advantage

Sheltered International combines expertise with state-of-the-art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost-effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

Why Cargo Insurance Policies Are the Best Ways to Protect Your Shipments

It’s vital for your business that your shipments arrive at their destination safely. While it’s true that carriers offer some amount of protection for your shipment, this coverage is very limited. To protect your business and your goods against unexpected events, purchasing cargo, or freight, insurance is crucial. Read on to learn more about the types of policies available, the limitations of carrier liability, and how Sheltered International can help you find the right insurance for your business and your peace of mind.

Understanding Carrier Liability and Declared Value

Warehouses and carriers will only be required to pay when loss or damage to your goods is proven to be their responsibility – and the burden of proof is usually on the shipper. That means that natural disasters, Acts of God, fire, and numerous other potential problems will leave you without financial protection. Likewise, all carriers have a limit of liability, resulting in a compensation far lower than the actual value of the goods. For example, an ocean carrier is limited to $500 per package.

Declared Value is a means of increasing this potential value; however, it still does not remove the burden of proof placed on the shipper and often still results in a compensation less than the shipment value. Though often confused with cargo insurance, Declared Value is not the same and does not offer the same level of protection.

What Cargo Insurance Covers

Cargo insurance protects your shipment while it is in transit, even as it moves through different modes and carriers. While carrier liability is limited, cargo insurance offers door-to-door coverage and will pay for losses that are outside the carrier’s control. Additionally, the shipper will recuperate the full value of the cargo lost or damaged, as well as freight or other associated costs. Coverage is generally either All-Risk or Free of Particular Average (FPA); which of the two primary types of policies is chosen will determine the spectrum of situations covered.

All Risk Insurance is the most common type of policy and covers by far the broadest range of incidents. All events are covered unless explicitly excluded in the policy. Commonly excluded situations include nuclear events, strikes, and riots, as well as innate flaws in the goods like inadequate packaging or decay.

By contrast, FPA coverage, or ‘named-perils coverage’ is more limited and excludes most partial losses of shipments due to common causes such as rough handling or pilferage unless explicitly named in the policy. It also does not cover heavy weather, theft of an entire shipping package, improper stowage, and other more common occurrences. Often, FPA coverage is the only available option for shipments of used merchandise and bulk goods. It is also most common for marine insurance policies, as compared to those covering other methods of transport like air freight or trucks.

What Cargo Insurance Doesn’t Cover

Of course, regardless of the type of policy chosen, it is important to note that cargo insurance only protects physical loss or damage. Customs rejection, cargo abandonment, delays, and other events that could result in financial losses are not covered, even under an All Risk policy.

How Sheltered International Can Help

Cargo insurance is an undeniably important part in protecting your business. Through our shipment-management software SiShips, we offer consultations and support in finding a policy that works for you.

Contact us today to learn more about how we can help your business.

What Business Owners Need to Know

As Donald Trump returns to the U.S. presidency following the 2024 election, the business community is gearing up for significant shifts in domestic and international trade. Trump’s previous term was marked by trade reforms, tariffs, and an emphasis on boosting U.S. manufacturing. Additionally, the Covid-19 pandemic during the final year of his first term reshaped both supply chains and market dynamics worldwide. 

Trade Policies from the First Trump Term

During his initial tenure, Trump’s “America First” approach altered trade relationships, emphasizing domestic manufacturing and reducing dependence on foreign suppliers. Tariffs on billions of dollars in goods from China created ripple effects for industries reliant on international goods and resources. 

Between 2018 and 2020, Trump’s tariffs on Chinese imports reached a cumulative value of approximately $360 billion. These policies forced U.S. businesses to pivot, find new suppliers, and re-strategize logistics. Economists note that while U.S. manufacturing grew in some areas, many sectors faced increased costs, with prices on imported goods rising as a result of tariffs.

Expected Domestic Trade Policies from the Campaign Trail

As Donald Trump enters his new term, his administration is likely to further support U.S. manufacturing through trade restrictions, tax incentives, and potential new tariffs aimed at protecting American industries.

One anticipated move is to incentivize American-made goods and discourage reliance on foreign suppliers. Keep an eye on sectors where the U.S. has been historically dependent, such as electronics and pharmaceuticals. This could translate to expanded tax breaks for companies that produce within U.S. borders, mirroring policies from 2017-2021 aimed at boosting domestic manufacturing capacity.

For logistics and supply chain professionals, a renewed emphasis on domestic production could shift demand patterns. Supply chain analysts project that reshoring efforts may intensify, creating challenges for those reliant on overseas production . Businesses may need to reconsider sourcing strategies, especially in high-demand industries like healthcare, automotive, and technology.

Small and medium-sized businesses might face unique challenges as tariffs rise. Trump repeatedly stated on the campaign trail that he would impose a minimum 10% tariff on all imported goods with a 60% tariff on goods from China. It is unclear whether these tariffs will become a reality as numerous economists warn of the negative effects. If they are put in place, businesses ready to pivot to domestic suppliers could benefit as the rest of the market races to catch up.

International Trade Policy Shifts and Trade Tensions

Trump’s prior administration initiated unprecedented tariffs on countries like China and allies like the European Union. The return of such strategies would renew trade tensions.

Following his return to the White House, Trump could renegotiate or withdraw from certain trade agreements. The president-elect said as recently as October that he wants to revisit the agreement he signed in 2018. “I want to make it a much better deal. I want to take advantage, now, of the car industry.” These potential changes may bring about stricter regulations on imports.

Industry-Specific Impacts to Watch

Different sectors will experience unique impacts based on Trump’s trade policies, with some industries benefiting and others facing challenges.

Domestic manufacturing could see a boost with incentives to reduce reliance on international suppliers, particularly for goods in critical sectors such as defense, electronics, and pharmaceuticals. Analysts suggest this may lead to job growth within the U.S., though higher costs may impact product pricing. CEOs like Elon Musk, who provided $130 million to the Trump campaign in its closing days, are betting big on the once and future president. So far, that bet appears to be paying off as Tesla stock climbed 15% the morning after the election.

One area that is not so rosy is agricultural exports. China instituted their own tariffs on soybeans and pork, in return for the Trump tariffs. Agricultural exports may once again be vulnerable to trade wars. “When we start putting tariffs on others, usually the retaliatory tariffs end up on American agricultural products,” said Bob Hemesath, a soybean farmer and the Chairman of Farmers for Free Trade.

With Trump’s previous emphasis on protecting American intellectual property, there may be tighter regulations on technology imports and exports. This is especially true for sectors where cybersecurity and intellectual property rights are at stake. Restrictions on hardware imports could impact technology firms dependent on foreign-sourced components.

The return of Donald Trump to the White House brings opportunities and challenges for American businesses engaged in domestic and international trade. From tariffs to regulatory changes, businesses will need to adapt. By preparing strategically—diversifying supply chains, planning financially, and monitoring compliance—business owners can position themselves for resilience in the global market.

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Sheltered International combines expertise with state-of-the-art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost-effective ways to ship your product.

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Good Faith Negotiations from Both Sides Prevent Prolonged Port Strike

After a brief three days, the East Coast port strike that threatened to disrupt domestic and international shipping has been suspended. Negotiators on both sides, led by I.L.A. President Harold Daggett and Secretary of Transportation Pete Buttigieg, brought temporary relief to business owners and logistics managers across the country.

The most notable part of the agreement is a 63% wage increase for longshoremen over the next six years. This is lower than the initial ask from the I.L.A. of an 80% increase, but far higher than the initial offer from employers represented by the United States Maritime Alliance. The agreed-upon framework extends the current contract through January 15, 2025. That pushes the possibility of another strike well beyond the upcoming election and holiday season.

What You Need to Know About the Port Strike

At the end of September, a strike was all but guaranteed. There was a significant gap between the requests of the I.L.A. and the offer from employers. Shipping logistics and  political experts theorized about the use of the Taft-Hartley Act to prevent a strike, but President Biden said he would not use those powers. A week later, executive orders were unnecessary as workers returned to the ports on October 4, 2024. 

The strike affected 14 ports, ranging from Boston, around Florida, to Houston. Fears of significant disruptions to the flow of goods have been put aside for now. However, there is still work to be done as the topic of automation is still unfinalized.

How Significant were the Effects on Imports?

The effects of the strike were immediate. Companies relying on just-in-time inventory systems were particularly concerned. For industries like retail, where timely product deliveries are essential, the delays had the potential to lead to stock shortages. With the forecast of a strike, many were able to increase their stock in advance. There were reports of panic buying toilet paper, similar to the first few weeks of the Covid-19 pandemic, in some markets. Ironically, 85% of toilet paper purchased by the United States is produced domestically. 

While cargo ships were forced to anchor offshore, the delays did not last long compared to the most recent strike in 2006 which lasted 11 days. 

Returning to Business and Preparing for the Future

With the strike now temporarily suspended, business owners can expect operations to return to normal. Limited backlogs at the affected ports are in the process of being cleared. 

Although the strike is currently suspended, there is still uncertainty regarding a permanent resolution. If negotiations break down again, there is a risk that the strike could resume. Business owners now have an opportunity to assess their current logistics strategy and take steps to mitigate future risks.

How SiShips Gives You the Advantage

Sheltered International combines expertise with state-of-the-art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost-effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

Port Strike Looking Increasingly Likely for East Coast

Implications for U.S. Supply Chains 

The possibility of a strike at East Coast ports has raised concerns among business owners and supply chain managers across the U.S. With the current labor contract between dockworkers and port owners set to expire on September 30, 2024, a strike as early as October 1st seems increasingly likely. 

What’s at Stake in the Labor Dispute

The driving force behind the potential strike is union demands for an 80% pay raise over the next six years. While this might seem excessive to some, it reflects broader tensions in the maritime labor sector. Dockworkers are also pushing for better work rules, which would give them greater flexibility and security at a time when artificial intelligence threatens many traditional jobs.

On the other side, port owners—representing major ports along the Eastern Seaboard and the Gulf Coast—are focused on increasing automation. This tug-of-war between traditional labor demands and the push for automation is causing the current friction between the two sides.

With negotiations still ongoing, both sides face a critical deadline. If no agreement is reached by September 30th, dockworkers are likely to walk off the job on October 1st, initiating a strike that could last several weeks. This potential disruption has already triggered alarm bells in the logistics industry, as even a short strike could have far-reaching consequences. 

Will the Government Step in to Prevent a Port Strike?

Given the significant role these ports play in the U.S. economy—handling approximately 40% of all imports—even a brief work stoppage could send ripples across multiple industries. For instance, ports such as New York and Savannah serve as critical gateways for goods ranging from consumer electronics to industrial components.

The last time dockworkers went on strike at East Coast ports was in 1977. Perhaps unsurprisingly, the issues at stake over 40 years ago were the same that they are today: job security and wage increases. 

Though President Biden has expressed reluctance to intervene by enforcing the Taft-Hartley Act, this stance could change if the port strike lasts more than a week. The Taft-Hartley Act has been invoked in the past to prevent prolonged strikes from damaging the economy, but it remains a last resort. Such a move would not be without precedent, Biden used the power of the federal government to block a nationwide railway strike in 2021. 

Similarly, while on the campaign trail earlier this summer, Vice President Kamala Harris said it was an option she would consider. This was part of the calculus behind the recent announcement from the Teamsters that they would not be endorsing any candidate in the 2024 election.

What Impact Would a Strike Have on Supply Chains?

A port strike of any duration would turn U.S. supply chains upside down. Businesses relying on just-in-time inventory systems could face significant delays, while smaller companies may struggle to find alternative transportation solutions. The disruption would lead to unpredictable shipping schedules, port backlogs, and a race for alternative shipping routes. 

The added pressure of a strike would come as many businesses are recovering from pandemic-related disruptions. For some industries, such as retail and manufacturing, the timing couldn’t be worse, as they brace for increased consumer demand in the final quarter of the year.

While a strike is unwelcome news for most businesses, capacity owners such as trucking companies and intermodal service providers could benefit. Freight rates are likely to rise as demand surges for transportation alternatives. However, this increase in cost is likely to hurt shippers, who will have to absorb higher transportation expenses as they scramble to maintain their supply chains.

How Business Owners Can Prepare for a Port Strike

To mitigate the impact of a potential strike, business owners should start by reviewing their supply chains and identifying vulnerabilities. Consider diversifying your supplier base or working with logistics providers to explore alternative ports, such as those on the West Coast or in Canada.

Additionally, having a solid contingency plan in place is crucial. This might involve increasing inventory levels ahead of time. The more proactive businesses are preparing for a disruption, the better equipped they will be to weather the storm. If you’re looking for guidance, don’t hesitate to call us at (904) 604-0000 to make sure you are ready for any eventuality. 

How SiShips Gives You the Advantage

Sheltered International combines expertise with state-of-the-art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost-effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.