Retail freight pull forward expected in advance of potential tariffs
Global trade tensions have potential to affect retail costs
President-elect Trump’s proposal to impose tariffs on imports from many countries, including China, Mexico and Canada, has introduced new dynamics for retailers to consider in the weeks and months ahead. During the past Trump administration, the policy-making process was often very public. If it follows the same pattern during this term, the situation will continue to become even more starting in 2025. Concepts that are currently ideas, like increased tariffs, will need to turn into draught rules and executive orders.
Because manufacturing for many retail categories takes place in regions like Asia, some manufacturers in industries that allow for it, have been pulling forward inventory before potential new tariffs are imposed. Retailers potentially affected by proposed new tariffs are encouraged to work closely with trade advisors and customs brokers to create scenario plans.
Balancing production and seasonal demand
It is important to remain mindful of the upcoming Lunar New Year, which runs from 29 January to 12 February 2025. Any endeavours to pull cargo forward will require an ability to ramp up production prior to the holiday observation to meet booking dates, as well as factor in seasonal slowdowns and shutdowns.