Welcome to the WHAT THE TRUCK?!? Newsletter presented by Truckstop. In this issue: Liberation Day tariff aftermath and more.
The tariffs are here … now what?
Across the board — As promised, President Donald Trump dropped a bombshell on the shipping world when he announced his initial slate of reciprocal tariffs during Wednesday’s Liberation Day press conference.
White House
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again.” – Trump during a Rose Garden event at the White House
FreightWaves reports, “Trump’s plan includes a baseline 10% tariff on trade partners, as well as 25% tariffs on certain imported vehicles and auto parts arriving into the U.S.” In addition, the White House published the new tariff policy, which includes an exemption for products and shipments that comply with the United States-Mexico-Canada Agreement.
But wait, there’s more. Trump says these reciprocal tariffs are only “kind reciprocal.” What he’s talking about is the comparison between the tariffs charged against the U.S. and the U.S. discounted tariff on the list of reciprocal tariffs above.
That image comes with some controversy, especially if you’re in trade and familiar with tariffs. After all, none of the countries on the tariff list actually charge the stated tariff rates across all U.S. imports. So, what is the math behind it?
Shortly after Trump’s Rose Garden event, James Surowiecki thought he had cracked the code to the tariff math. The formula he used was (exports – imports) / imports.
Ryan Petersen’s team at Flexport then mapped out every country on the tariff list using that formula and found that it matched up.
White House Deputy Press Secretary Kash Desai clapped back against the shoddy math allegations by posting the formula they used. … However, when you look at what the values are set to, you’ll see the formula reduces back to what Surowiecki deduced.
Some are also wondering if the whole implementation was government by vibe coding as multiple popular large language models gave similar answers to how they’d impose these tariffs.
The inclusion of Heard Island and McDonald Islands, a territory with a population of zero and only inhabited by penguins, has led to questions about how much thought was put into this.
Aftermath – A harder pill to swallow for shippers than the tariffs themselves is the uncertainty around them. Flexport founder and CEO Petersen advised on X, “A cabinet official told me on Friday that the reciprocal duties announced today are the ‘start, not the end’ of the negotiating process.”
Since the tariffs are reciprocal and the prospect exists for nations to renegotiate, shippers are uncertain if they should make the investment to move their sourcing or if they take it on the chin and hope that a better agreement is struck.
Leading up to Liberation Day, Vietnam had been scrambling to appease Trump by “[Cutting] import duties on a range of goods, including cars, liquefied gas and some agricultural products.” Despite that, they were slapped with one of the heaviest tariffs on the board at 46%. The Wall Street Journal reports, “Prime Minister Pham Minh Chinh said Vietnam should establish a rapid-response team to formulate a plan.”
While many of the countries on the list have stated that they’re willing to negotiate and wouldn’t retaliate with countermeasures, the same can’t be said for China, Canada and the nations of the European Union. While none of these countries have specified what those countermeasures would be, they don’t appear to want to escalate the situation at this stage.
Give your freight forwarder a hug; they’re going to need it this week. Although many shippers have been pulling forward freight in anticipation of tariffs, since many of the new ones are higher than expected, this week should see vessel slots fill up lightning fast.
Will trucking win in the trade war? FreightWaves CEO and founder Craig Fuller thinks so. But, with goods potentially costing 10%-50% more, how is the consumer going to generate that much volume when they’re tapped out? He reasons, “For every manufactured product in the Americas it generates 3x more trucking shipments than a seaborne imported good.”
Amazon and e-commerce sellers are about to be walloped by these tariffs. However, they did finally get a big W. Duty-free status for shipments under $800 entering the U.S. under Section 321 has been eliminated for China and Hong Kong … sort of. The catch is they still don’t have a system in place to process duties on those imports.
In 2022, Section 321 shipments made up 83% of total U.S. e-commerce shipments. Two-thirds of those shipments come from China.
ShipHero founder Aaron Rubin sees this as a boon for warehouse automation, robotics and software. It isn’t like shippers necessarily want to import out of China, it’s that consumers vote with their wallets so in turn shippers source from the best, cheapest places they can. As labor in the U.S. costs more than in countries we traditionally source from, how are we going to deploy competitive manufactures here? I hope those Optimus bots can sew.
Liberation Day wasn’t the only news that had the internet watching Wednesday. Nintendo also unveiled its latest console, Switch 2, during a Nintendo Direct earlier in the day. The Switch sequel immediately turned off some fans with eyewatering prices of $449 for the base model and $80 for Mario Kart World (the original Switch was $299 and games were $60.)
Over the past few years, due to growing trade tensions between the U.S. and China, Nintendo shifted production to Vietnam. Vietnam now accounts for 60% of Nintendo’s U.S. shipments. Vietnam was also hit with a 46% tariff Wednesday.
Kotaku warns that these new tariffs could impact Switch 2 costs, though it is uncertain if the already high price tag for the console already has them baked in. The Switch 2 will retail for $330 in Japan, leading many to believe they have been.
All things considered, was Liberation Day a W or an L? I asked my audience, and you were torn almost right down the middle with 49.2% saying it was a win and 50.8% saying it was a loss. What do you think? Email me.
WTT Friday
Art of truck wraps; automating 36M breakdowns a year; Switch 2 – Friday on WHAT THE TRUCK?!?, I’m catching up with Total Truck Branding’s Stephanie Burueana and Mario Lekovic to talk about the art of truck wraps. Their award winning company is responsible for wrapping some of the best-looking trucks on the road. We’ll find out how the whole process works and what it takes to win a championship.
ABT is looking to automate 36 million breakdowns a year in the multibillion-dollar truck repair space. We’ll meet the father and daughter team of Alan Larsen and Rachel Havron at ABT and find out how they’re advancing maintenance into an AI-led future.
Plus, Nintendo’s Vietnam bet bites them in the butt; tariff fallout; and more.
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