Summary:
- A court ruling on May 28th, 2025 declared tariffs issued under the International Emergency Economic Powers Act (IEEPA) illegal, affecting the “Liberation Day” tariffs, but this decision was appealed and tariffs were reinstated on May 29th, kicking off legal battles.
- Tariffs on Chinese imports, at one point exceeding 145%, caused a 1000% surge in blank sailings on China-U.S. trade routes, severely affecting port volumes in major hubs like Los Angeles and Long Beach. The reduction of the tariff has caused blank sailings to drop and volumes to begin to creep back to levels seen in 2024.
- The recent reduction of the tariffs on Chinese imports is causing a surge in shipments from China, raising concerns about potential increases in port congestion and delays in the coming months.
Current state of tariffs
On May 28th, 2025, a court ruled that all tariffs issued under the International Emergency Economic Powers Act (IEEPA) are not legal and have been struck down. This applies to the “Liberation Day” tariffs and those on China, Canada, and Mexico before Liberation Day. However, this decision was swiftly appealed and reinstated on May 29th, amidst ongoing legal battles.
Tariffs unaffected by court proceedings include a 25% tariff on automobile imports (10% on imports from the UK) and a 25% tariff on steel and aluminum imports, with no additional tariffs from the UK.
Despite the legal challenges, the Trump Administration remains committed to enforcing the Liberation Day tariffs through alternative means.
Main U.S. trade partners
According to data from the millions of shipments managed annually by project44, the United States primarily imports goods from the following top countries by volume:
China, which is included in the BRICS category, is our largest provider of imports, followed by the EU and Vietnam. These three regions make up more than 50% of the imports tracked by project44 in 2024.
Below are the countries that see the most American exports by volume based off project44 data.
With China separated from the BRICS nations, they receive 8.5% of exports, meaning Canada, China, and the EU make up more than half of the shipments exported from the United States in 2024.
2025 has been a year of unprecedented tariffs on imports to the United States, which resulted in tariffs on goods from the United States as well. While the tariffs levied under the IEEPA are possibly going to be reversed, the tariffs levied by other nations as a result remain and their future is uncertain at this time. Global trade tensions continue to rise as the Trump Administration strives to make new trade deals that are more favorable for the United States.
Impacts from recent tariffs
Despite temporary halts, recent tariffs have had significant impacts. For instance, during periods of high tariffs on Chinese imports (>145%), there was a dramatic increase in blank sailings (up 1000%) on routes from China to the United States, affecting major ports like Los Angeles and Long Beach.
The Trump Administration reduced the tariff to 30% the week of May 12th, which has resulted in a surge of orders from China into the United States. Blank sailings have continued to decrease since the announcement of the reduced tariffs.
While much of the increase in volume has not been gated in to its port of origin, orders from China are increasing and will likely continue to increase further throughout the next month. The increase in volumes could cause port congestion, both in China and in the United States, as the volume hits these ports. This is being closely monitored.
Strategy shifts in the wake of uncertainty
Short-term, there was a push to pull forward inventory earlier this year to mitigate the impact of potential tariffs, which were a key element of Donald Trump’s campaign. This is apparent in the imports seen from China, where volumes were up significantly compared to 2024.
Amidst fluctuating trade policies, many companies have adopted a cautious “wait and see” approach. Short-term strategies included pulling forward inventory to mitigate potential tariff impacts, a cornerstone of former President Trump’s campaign promises.
Given the unpredictability of trade policies, companies are hesitant to make substantial investments in new manufacturing facilities or overhaul complex supply chains. The shifting landscape underscores the uncertainty facing businesses, particularly with upcoming presidential transitions and ongoing legal challenges.
Summary
The current tariff landscape remains highly volatile, with recent legal rulings impacting the “Liberation Day” tariffs and ongoing trade tensions. While the tariffs remain in effect for now, the overall uncertainty surrounding U.S. trade policies—exacerbated by legal battles and shifting political priorities—has led many businesses to adopt a cautious stance. With significant disruptions in trade routes, especially from China, and the possibility of fluctuating tariff rates, companies are refraining from major investments or strategic overhauls until the future of these policies becomes clearer.
