Tariff whiplash: Cross-border truck freight gets a temporary jolt

President Donald Trump’s tariff deadline extension in July may have given cross-border trucking freight a slight boost. However, that lift in freight may be short-lived.

According to the latest numbers from the Bureau of Transportation Statistics, freight hauled by trucks across the borders ticked up by less than 1% year-over-year and 3% compared to June. Over the past 10 years, cross-border freight in July has experienced a month-to-month decline every year except 2020. That year, freight began to rebound from massive disruptions in April caused by the start of the COVID-19 pandemic.

Typically, trucking freight slows in July. But Trump’s trade policies have created unique situations. His fluctuating tariffs have caused market uncertainty. When tariffs pause, businesses rush to stock up on inventories.

Since January, cross-border trucking freight has fluctuated each month, increasing and then decreasing. Year-to-year, cross-border freight dropped in three consecutive months from April through June.

On Feb. 1, Trump announced a 25% tariff on Mexican and Canadian imports. A few days later, the import tax was paused for 30 days. And in early March, certain United States-Mexico-Canada Agreement (USMCA)-compliant goods were exempt from the tariffs.

On June 29, Canada and the U.S. resumed trade negotiations, hoping to reach a deal by the end of July. Two weeks later, Trump said he would impose a 30% tariff on Mexican goods beginning Aug. 1. On July 31, Trump paused that tax for 90 days to allow a deal to be hammered out.

On the world stage, the global reciprocal tariffs were originally set for April before being put on hold. Those tariffs were supposed to go into effect July 9 but were delayed another month just two days prior.

In July, the Cass Shipment Index noted the effects of the highest tariffs since the 1930s.

“Forward-looking visibility remains highly dependent on policy development and legal challenges,” Cass said. “The uncertainty has lowered the economic outlook, and pre-tariff inventory building will lead to destocking regardless of the outcome of trade negotiations in the coming months.”

While the tariffs have caused uncertainty across nearly all industries, the tariffs themselves find themselves in a level of uncertainty. In September, a federal appeals court upheld a lower court’s ruling that the import taxes are unconstitutional. The Supreme Court will hear oral arguments on Nov. 5.

In its latest Market Update, the OOIDA Foundation noted that “economic pressure from tariffs is mounting.” While the U.S. economy has remained resilient amid erratic trade policies, most of the effects of tariffs have yet to arrive. The Foundation said that the next few months could “clarify the extent to which tariff-driven inflation may be impacting manufacturing.”

Regarding cross-border trucking freight, the Foundation reported that businesses implemented another round of frontloading in July. However, inventories may have peaked, potentially affecting freight movement in the coming months.

“Inventory levels jumped in July while sales continued to fall,” the Foundation stated in its September Market Update. “Wholesalers frontloaded inventories to get ahead of tariffs. While those inventories were being drawn down at first, they’re starting to rise again. This may be due to weak demand overall, even despite the increased need for data centers.”

Zooming in, the year-over-year increase was driven by Mexican imports. Trucking freight at the southern border rose 7%. Keeping with the theme all year, another surge in computer-related freight in Mexico propped up imports. That’s despite a large drop in vehicle imports. There were increases in seven of the top 10 Mexican commodities.

Meanwhile, trucking freight in and out of Canada was not going well. Freight from the northern border dropped by 8%. All top 10 commodities except pearls/stones/metals declined. Like computer-related freight in Mexico, pearls/stones/metals in Canada is a category that’s seen massive growth this year. Month-to-month, it surged 250% in July. LL