Trump tariffs: 'Nobody likes this level of volatility'
Heraclitus was right: No man writes on the same tariff twice—because he is not the same man, and it is not the same tariff.
President Donald Trump issued sweeping 25% tariffs on all steel and aluminum imports to the U.S.—but not before threatening and then quickly revoking an extreme 50% tariff on Canadian steel and aluminum.
Current tariffs, meanwhile, are bringing extreme fluctuations to freight demand and linehaul pricing for the cross-border spot market. Uncertainty and roller coaster disruptions are already harming the chance of a freight market recovery in 2025, according to industry analysts.
Tariffs: The story so far
On the campaign trail, Trump promised major tariffs on all imports. Shortly after his inauguration, Trump said 25% tariffs against Canada, Mexico, and China could take effect on February 4.
On the February deadline, however, Trump said he reached deals with Canada and Mexico to postpone the tariff threats for a month. The tariffs against China took effect without issue.
On March 4, Trump followed through on his threats and levied his major tariffs on Canada and Mexico while also furthering tariffs on China.
Shortly after, Trump said that he would make a temporary exemption for the automotive sector. Later that week, the exemption took place: a month delay on all goods defined as “free of duty” by the United States-Mexico-Canada Agreement.
“Nobody likes this level of volatility,” Dean Croke, principal analyst for DAT Freight & Analytics, told FleetOwner. “That’s what I think most of us are concerned about: that all of this market volatility just means that any chance of the market recovery in the second half of the year has kind of disappeared.”
See also: 10 strategies to thrive in chaotic, uncertain trucking business markets
Sweeping metal tariffs
Aluminum and steel products in the U.S. could soon become much more expensive.
Trump followed through on his promise to issue sweeping 25% tariffs on steel and aluminum imports from any country.
The import fee echoes Trump's first term. In March 2018, Trump issued a 25% tariff on all steel imports and a 10% tariff on all aluminum imports, later carving out special exemptions for countries. According to the International Trade Commission, following the 2018 metal tariffs, steel prices skyrocketed, steel imports shrank 17%, and domestic production grew only 5%. Aluminum imports shrank 19%, while domestic production grew by around 11-22%.
Other countries retaliated against the U.S. for Trump's aggressive trade policies. The European Union announced a $28 billion countermeasure against U.S. goods, set to take effect in April. The EU took similar countermeasures against Trump's 2018 metals tariffs. Canada also announced retaliatory trade duties on $21 billion worth of U.S. goods. Canada made a similar retaliation in 2018.
Trump's 50% Canadian tariff threat
Trump said on Truth Social Tuesday that he instructed his Secretary of Commerce to double the fee for importing Canadian steel and aluminum—from 25% to 50%—starting March 12, at the same time as his global metals tariffs.
The escalation came after Ontario increased electricity charges by 25% for U.S. customers in Minnesota, New York, and Michigan. Ontario Premier Doug Ford said that the charge could worsen as the trade war heats up. However, hours after Trump's tariff announcement, Ford announced on social media that he would suspend Ontario's energy upcharge. Trump likely canceled the extreme tariff threat afterwards but still imposed the same 25% metals tariffs facing imports from other countries.
If it persisted, a 50% tariff on the Canadian metal imports would have been extreme. The U.S.’s biggest aluminum and steel supplier is Canada by a large margin.
The tariffs would drastically raise prices in several industries, including truck and trailer manufacturing. They would also depress cross-border freight demand for the targeted goods.
According to estimates by supply chain professor Jason Miller, the U.S. imported almost three times more Canadian primary aluminum than it produced in 2024—2 million tons imported from Canada compared to 670,000 tons produced domestically.
Depressed demand for key industries
According to Avery Vise, VP of trucking for FTR Transportation Intelligence, the current tariff environment will likely introduce inflation and reduce freight demand for many key trucking segments.
“The people who support tariffs think that this will lead to greater domestic production—and yes, if that were to happen, we would see a big benefit for trucking,” Vise told FleetOwner. “But the things that have to fall into place for that to happen are almost fanciful. They just aren’t going to happen … It’s likely that the overall picture is going to be just more expensive products, which are likely to depress demand.”
See also: How to build a fleet future during times of uncertainty
Vise pointed to four major industries tied to trucking where tariffs could harm freight demand: Automotive, metals, lumber, and food.
“I think automotive is clearly the biggest one overall because of just how many inputs go into it,” Vise said. “There’s this real symbiotic and integrated connection between the U.S. and Mexico and the U.S. and Canada when it comes to the automotive sector.”
In the automotive sector, components cross borders multiple times for several steps of the assembly/manufacturing process. The automotive sector generates about a fifth of dry van traffic, Vise said, while the steel and aluminum behind the sector are also a massive source of volumes for flatbed hauls.
The trade war is also putting food and beverage goods in the crosshairs. For price-sensitive goods like those that Mexico exports, it could mean reduced traffic at the southern border.
“Food is a big part of the northbound traffic from Mexico,” Vise said. “That is potentially at risk, especially since food is much more subject to price sensitivity.”
Some foods are more vulnerable to price changes. Foundational foods like eggs enjoy consistent demand despite skyrocketing prices, while demand for foods like avocados are highly sensitive to price changes. Avocados are one of Mexico’s top produce exports and among the products still targeted by Trump’s tariffs. Retaliatory tariffs could further harm demand for hauling food.
Depressed freight demand
The tariff threats since Trump was elected pushed shippers to move goods early before the taxes took effect. Heightened demand to build inventories raised spot rates for many cross-border hauls and moved peak shipping seasons earlier.
FTR’s and DAT’s analysts expect the early inventory buildup will mean weaker freight demand could follow later this year.
“As we’ve been telling people for months now: what goes up is going to come down,” FTR’s Vise said. “Any surge you get due to the tariffs is going to be offset, because the reason for doing that is to build inventories.”
Earlier forecasts suggested that freight demand would likely rise throughout the year, bringing much-needed upward pressure on carrier rates by the end of the year. Now, a rate upturn might come later than many hoped.
“It means we’re going to have a pretty flat Q3, Q4 peak shipping season,” DAT’s Croke said. “It’s inevitable that we’re going to see pretty flat freight volumes for the rest of the year, and it makes the 2026 prediction from last year being the recovery year more likely … I suspect that pricing power will shift back toward shippers in the short term because carriers are going to have to try and keep volume.”
Early inventory buildup is not the only factor that lowers freight demand. Trump’s hostile behavior with key trade partners means that its neighboring countries might not be so eager to trade with the U.S. With the country jettisoning its favor and trading power with partners, freight demand and linehaul rates could suffer further.
“I think the damage has been done north of the border,” Croke said. “There is no question that Canadians have taken this personally and are already looking to find other markets for their products.”
What will Trump’s tariffs do next?
It is impossible to predict precisely what Trump, Canada, or Mexico will do next as the trade war intensifies.
“The uncertainty is the real issue,” Croke said. “Who knows? We don’t know whether the tariffs are going to be a particular percentage and when they’re going to be implemented, if implemented at all.”
The unpredictability is clouding business decisions and pushing down economic confidence. Vise, however, predicts some carve-outs for automotive are likely under the next tariff shakeup.
“I would not be surprised at this point, if we do get another tariff on April 2, that there might be some carve-out,” Vise said. “I do not see, especially for the automotive industry, that the scenario we were going to have March 4 comes back in April. I don’t think that’s a tenable position for the Trump administration to take; there are simply too many jobs and too big a piece of the economy at stake.
“These tariffs are supposed to be temporary,” Vise continued. “They’re based on, supposedly, drug tracking and on illegal immigration.”
About the Author
Jeremy Wolfe
Editor
Editor Jeremy Wolfe joined the FleetOwner team in February 2024. He graduated from the University of Wisconsin-Stevens Point with majors in English and Philosophy. He previously served as Editor for Endeavor Business Media's Water Group publications.