Tight timelines face shippers ahead of Aug. 1 tariff dates

As the White House continues to send out letters to United States trading partners regarding reciprocal tariffs that will be implemented on U.S.-bound imports, there remains a general sense of supply chain and logistics uncertainty for industry stakeholders in terms of next steps.

That was made clear by National Retail Federation (NRF) Chief Economist Jack Kleinhenz last week, in the NRF’s Monthly Economic Review.

“This year began with high expectations for the strength of the U.S. economy,” Kleinhenz said—noting strong 2.8% year-over-year growth in gross domestic product in 2024 paced by consumer spending and helped by business and government spending. “Since then, anxiety and confusion have taken center stage in the economy and financial markets as uncertainty over public policy has intensified. It was difficult to judge how policy changes would impact the economy in early 2025 and it remains so now. Economic fundamentals appear solid at this juncture, but uncertainty is pervasive. There are many crosscurrents surrounding tariffs, immigration and deregulation, and everyone is sorting through what the tariff rates are going to be, how they will impact inflation for retail products and, importantly, how long they will be in place.”

Addressing the impact of tariffs on prices, Kleinhenz said that the impact has yet to be clearly seen, with the caveat that if the large increases in tariffs go into effect and are sustained, it will have a negative impact on consumer prices and reduce spending which could subsequently result in higher unemployment, coupled with the Federal Reserve not expected to cut interest months in July, while noting that remains a possibility in the fall.

Regarding the push back of the reciprocal tariffs to Aug. 1, Paul Bingham, director, transportation consulting, for S&P Global Market Intelligence, explained that ocean shippers have very little additional time to bring in imports to avoid the tariffs. The situation is further complicated by the revised country-specific import tariff rates revealed in the 14 individual letters [sent on July 7 and now at more than 20] with posted rates of 25% to 40%.

“The latest S&P Global Market Intelligence trade and economic forecasts continue to assume that there will not be a return to the U.S. reciprocal import tariff levels announced initially on April 2,” said Bingham. “However, the ‘reciprocal’ tariffs are not the only U.S. import tariffs affecting U.S. trade and the economy, as the commodity category-specific Section 232 tariffs are also influencing U.S. importer behavior.  S&P Global is now assuming a higher effective U.S. import tariff rate on copper, but lower effective tariff rates on pharmaceuticals, steel, and aluminum will be in place. The net effect of these latest U.S. import tariff developments is a lower overall average effective import tariff rate than appeared likely in June.”

Read more: Shippers face tight timelines and mounting uncertainty ahead of August 1 tariff shift

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