#TariffsPause Tariff Pause 2025: What You Need to Know

The recent announcement of a 90-day reciprocal tariff pause, excluding China, has sparked a significant market rally. But what does this mean for global shippers and businesses? Let's break it down.

What's Paused and What's Not?

- *Reciprocal Tariffs:* Suspended for 57 trading partners, including the EU, Japan, and South Korea, for 90 days. These countries will face a baseline 10% tariff.

- *China:* Excluded from the pause, with tariffs reaching a staggering 145%, including a 125% reciprocal tariff and a 20% fentanyl-related penalty.

- *Sectoral Tariffs:* Remain in place for steel, aluminum, autos, and certain critical materials.

Key Implications for Businesses

- *Supply Chain Vulnerability:* Review your supplier network and assess exposure to regions with high or changing tariffs. Consider reshoring or diversifying production to lower-risk countries like Vietnam, India, or Bangladesh.

- *Inventory Management:* Move goods quickly before tariffs potentially return. Ocean freight is busy, and air cargo demand is rising.

- *Cost Tracking:* Maintain detailed records of cost increases by product and origin to support price negotiations or future duty drawback claims.

What Happens After July 9?

- *Base Case:* Flat 10% tariffs continue.

- *Escalation:* Tariffs rise sharply, especially on Chinese, Mexican, or Canadian goods.

- *Selective Targeting:* High rates return for specific industries or countries.

Action Items for Shippers

- *Review Supply Chains:* Identify risks and explore backup options.

- *Track Costs:* Document cost increases and prepare for potential tariff hikes.

- *Stay Agile:* Build flexibility into your supply chain and plan for multiple scenarios ¹.