Diego Rodríguez Paez
Director of Logistics and Industry Practice
AMI
As anticipated, the Trump administration’s new round of reciprocal tariffs is making waves across the global economy. With the United States-Mexico-Canada Agreement (USMCA) in place, Mexico and Canada have been temporarily spared from these new reciprocal measures. However, the automotive tariffs remain in effect. We expect this sector to stay under the tariff scenario until the USMCA is renewed, most likely before the end of 2025.
The primary focus of these reciprocal tariffs is Asia, targeting key economies such as Vietnam, China, Japan, South Korea, Taiwan, and India. China will likely respond to U.S. tariffs by implementing retaliatory duties on American products on a larger scale. With the new 34% tariff added to the previous 20%, its real tariff rate now stands at 54%. It is very likely trade tensions will escalate further.
Vietnam has the second highest tariffs, 46%, as the country benefited the most from the shift in supply chains after the first trade war with China in 2017. A deeper trade analysis reveals that Chinese companies moved production facilities to Vietnam to escape past US tariffs.
Preliminary list of U.S. reciprocal tariffs
President Donald Trump has revealed his list of tariffs on U.S. trading partners while speaking at the White House.
Chart showing U.S. reciprocal tariffs by country
Note: This is not a comprehensive list.
Source: The White House
High tariffs on Asian textile manufacturers like Vietnam, India, or Bangladesh could create the perfect opportunity for Central America to attract new production to the region. With Asia facing rising labor costs and tariffs, Central America could offer a more cost-effective alternative for companies looking to avoid high import duties. However, Vietnam and other Asian countries will likely begin strategic trade adjustments to purchase more American goods and reduce import tariffs on U.S. products, aiming to de-escalate trade tensions to prevent the loss of market share.
One notable aspect of these reciprocal tariffs is the global 10% tariff rate. This baseline is a calculated strategy to force one-on-one trade negotiations. By establishing a universal starting point, the US administration aims to leverage individual weaknesses to secure more favorable terms for American industries. The upcoming weeks will determine how each country retaliates or negotiates its trade relations with the US. The key takeaway is that the Trump Administration’s approach to aggressive bilateralism reinforces its commitment to intimidate countries that depend on US consumers buying the goods they produce.
How These Tariffs Will Affect Logistics and Transportation
1. Increased Shipping Costs and Delays
With higher tariffs on imports from Asia and Europe, companies may need to adjust their supply chains, leading to increased demand for alternative shipping routes and modes of transportation in countries with lower tariffs. As businesses shift sourcing strategies, this could result in higher freight costs, potential port congestion, and longer transit times, especially in Mexico and Central America.
2. Diversification of Trade Routes
As Vietnam has demonstrated with its tariff reductions on U.S. goods, other nations, such as Brazil, may follow suit to uphold trade relations and reduce tensions. This could result in changes to logistics patterns, with increased demand for air and sea freight to and from countries that offer rapid tariff relief. We anticipate that greater trade diversification will likely cause Chinese goods to flood the Latin American region as producers seek new markets to offload goods priced out of the U.S. market. Logistics providers should be quick to adapt to these new trade corridors.
3. Strain on Domestic Transportation Infrastructure
Retaliatory tariffs and supply chain realignments may lead to surges in domestic manufacturing and reshoring efforts. This could pressure trucking, rail, and warehousing capacity, especially in the USMCA region driving up transportation costs and leading to short-term bottlenecks in key U.S. logistics hubs.
Next Steps
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