Tariffs will create ‘more loss than gain,’ according to supply chain expert

President Donald Trump has granted a one-month exemption of tariffs on imports from Mexico and Canada for U.S. automakers, it was announced on Wednesday, March 5.

CNBC reported that Trump is also open to additional tariff exemptions.

On Tuesday, March 4, the U.S. imposed blanket 25% tariffs on imports from Mexico and Canada – taxing Canadian energy products such as oil and electricity at a lower 10% rate.

While the White House has said the tariffs are about stopping the smuggling of drugs such as fentanyl, during Tuesday night’s address to Congress, the president also suggested the tariffs are about clearing U.S. trade deficits.

Jason Miller, an associate professor of supply chain management at Michigan State University’s Eli Broad College of Business, offered his insight as to what all of this means for the trucking industry.

During a recent interview with Land Line Now, Miller said that while there is still a lot that could develop over the coming weeks, carriers should begin making plans for a tough 2025.

“If you’re a trucking company, you now need to start sort of planning for one of those ‘not-good-case scenarios’ for how 2025 could work out,” Miller said.

As for what immediate impacts drivers may see, Miller said there could be delays at U.S. border crossings from the collection of tariffs. Additionally, he said there are “an awful lot” of Class 8 vehicles purchased from Mexico – something that will become more expensive with added tariffs.

Miller acknowledged that the economic impacts on the trucking industry from the tariffs may not be negative for all but said he expected positive gains to be minimal.

“It’s going to disrupt freight networks in that we’re going to see some companies are going to gain business from this, (while) some companies are going to lose business from this,” Miller said. “My guess is there’s more loss than gain.”

In February, the Owner-Operator Independent Drivers Association said it was too soon to determine the full impact the tariffs could have. OOIDA acknowledged, however, that increased taxes could complicate things when it comes to recovering from a prolonged freight recession. 

“Tariffs on America’s trade partners have the potential to inhibit the recovery from a freight recession that has been acutely felt by America’s small-business truckers, but it is too early to make predictions on specific downstream economic effects,” the Association said. “OOIDA’s trade experts will continue to monitor the effects of these policies as trade negotiations develop and will keep our Association members informed.”

On Tuesday, March 4, the American Trucking Associations issued a statement, saying the tariffs would “undo the progress” made by the U.S.-Mexico-Canada Agreement that took effect in 2020 while reducing cross-border freight and increasing operational costs.

“The longer tariffs last, the greater the pain for truckers as well as the families and businesses we serve,” ATA president Chris Spear said in a statement. “The Trump administration knows our industry well and understands how vital trucking is to our economy and supply chain. … To prevent unnecessary economic pain, the trucking industry urges all parties to come to the table once again to swiftly reach a new agreement.” LL

Listen below to Land Line Now’s full interview with Jason Miller, associate professor of Supply Chain Management at Michigan State University’s Eli Broad College of Business.