Open Road - Winter 2026
Business Economy
Brittany Caldwell 2026-01-24 14:07:00
HOW THE TRUCKING INDUSTRY CAN ROLL FORWARD AMID RISING TARIFFS
The wave of tariffs in 2025 has made a significant impact on transportation, specifically the trucking industry. On one hand, the trucking industry already experienced a downturn in profits due to supply shortages during the COVID-19 pandemic. On the other hand, the tariffs could introduce some possible benefits to manufacturing and domestic trade. While the impacts have not gotten worse, it has not rebounded as quickly in the past five years as people would like to see. 2025 was supposed to be the year experts believed stagnation would be in the rearview mirrors, but with the new tariffs, the future of transporting goods is unclear.
What Are the Tariffs?
In February 2025, President Donald Trump signed three executive orders to impose 25 percent tariffs on Canada and Mexico and 10 percent tariffs on China, using executive powers granted by the International Emergency Economic Powers Act (IEEPA). These tariffs were intended to protect border security and crack down on fentanyl.
In April 2025, Trump announced a list of new U.S. tariffs as “reciprocal tariffs” in response to other countries’ tariffs and tax rates. These included imports from nearly every country that trades with the U.S. and increased tariffs on Canada, China and Mexico. It stood separate from tariffs on individual goods, like auto parts and trucks. Many fluid changes were made to these trade deals, and courts have since debated if the IEPPA tariffs were constitutional.
For the trucking industry in particular, Trump put a 25 percent tariff on imported medium and heavy-duty trucks, which raises prices by thousands of dollars. The countries that mainly export those trucks include Mexico, Canada, Japan, Germany and Finland. According to the Institute for Energy Research (IER), the U.S. imports a large percentage of its heavy trucks from Mexico and Canada (78 percent and 15 percent, respectively). IER stated it is uncertain how light-duty trucks will be affected by the tariffs under current trade agreements with the European Union and Japan.
The Trucking Industry’s Response
On March 4, 2025, Chris Spear, American Trucking Associations president and CEO, released a statement on the new tariffs imposed. He said the trucking industry supports Trump’s purpose to tackle the fentanyl, immigration and human trafficking issues through legislation and border security. Spear acknowledged the consequences of the tariffs on American households through rising prices on everyday goods and its direct impact on the freight supply chain.
In his statement, Spear said in part, “The longer tariffs last, the greater the pain for truckers as well as the families and businesses we serve. The Trump Administration knows our industry well and understands how vital trucking is to our economy and supply chain.” He added the industry hoped for a quick agreement to minimize long-term economic hardships.
The Possible Effects of the Tariffs
Supply and Demand
Businesses that rely on transportation to ship supplies will see the brunt of the tariffs. With consumers reducing their spending, this may lead to reduced shipping needs and less freight on the road. Domestic manufacturers may pull back on how much they produce. Manufacturing plant locations would have less of a demand and may have to spend more money to store inventory if companies (and ultimately people) are buying less products. With more tariffs, trucking companies could start to see rising costs in trucks, parts and equipment. So, tariffs can affect supply and demand for the industry.
Workers and Companies
Tariffs don’t just put pressure on goods; it also puts pressure on the drivers and the companies they work for. Drivers may be approached to work longer routes that could consolidate stops for efficiency. In an article for business and commerce platform Wex, content strategist Nori Gale suggests small and midsize carriers are the most at risk due to the tariffs, and some aspects of freight are in jeopardy versus general freight. Since those areas of transportation are more niche, there is even less of a demand for them. Some companies may opt to put a pause on purchasing new vehicles or delay repairs until they are more financially equipped to do so, but those practices could lead to more issues in the future.
International Trade
Overall, trade relationships with other countries that do business with the U.S. will be strained. Tariffs show how transportation is affected by global policies, as shipping across borders will be an ongoing issue stemming from the tariffs. Different trade routes and fees on carriers in China, for example, will shift port activities. High prices reduce the number of goods imported into countries, demonstrating a direct impact on imports. As a result, there will be less overseas manufacturing.
The Possible Benefits of the Tariffs
The tariffs could be useful for the economy. When there is an increase on taxes for imported goods, companies may be encouraged to focus on domestic processes. Domestic businesses can grow their company by making goods cheaper and drive demand. With a reduction in foreign competition, companies are encouraged to bring more of its manufacturing processes domestically rather than outsource internationally.
According to the U.S. Bureau of Economic Analysis (BEA), as of September 25, 2025, there was an increase in real gross domestic product (real GDP) in the second quarter of 2025, signaling more consumer spending and less imports, offset by a decrease in investments and exports. In a report, the BEA said the real GDP was estimated to have increased at an annual rate of 3.8 percent in the second quarter, defined as April through June 2025.
Research from the Economic Policy Institute points to tariffs as being a tool for smart industrial and trade policies, but for a broader strategy and not on its own. In a fact sheet published in March 2025, EPI reported tariffs can support domestic trade policies, such as with economic stability, and protect domestic production in certain areas.
Strategies to Stay Ahead
There is no definitive answer as to how long the new trade tariffs will be in place. Profits, investments, manufacturing plants and business plans could be altered. However, there are some ways to stay ahead of the tariffs.
One of the recommended strategies is to budget accordingly and stay on top of cost management. There may be a place where you can cut costs to offset the tariffs but ensure it does not lessen efficiency or put production crews in a tight spot, which can lead to burnout. When it comes to efficiency, consider how workflows can be improved. Understanding when maintenance needs to occur on vehicles can help prevent costly repairs further down the line.
Set up cross-border logistics and figure out how to comply with current policies. There may be an opportunity to use alternative supply manufacturers and partners. Streamlining documentation, increasing customs compliance training and investing in technology can keep the process running smoothly.
Being alert and informed helps adapt to policy changes. One minute, there may be a tariff, and the next, there could be an alteration. Encourage flexibility and create contingency plans. Good communication among organizations and policymakers helps to bring up concerns fleets may have regarding transportation.
Updates
As the transportation industry is hopeful for brighter days ahead, there is already a break for consumers in the agricultural industry. On November 14, the Trump Administration announced an executive order modifying the scope on some of the tariffs that took effect earlier in the year. Many of the trade deals included agricultural products not grown or produced in the U.S., and these will no longer be part of the reciprocal tariffs: coffee, tea, tropical fruits, cocoa, spices, bananas, oranges, tomatoes, beef and some fertilizers. While this update does not directly relate to the tariffs impacting trucking companies, there is possibility of a little reprieve in terms of trade negotiations.
Editor’s Note
This article was written before President Trump announced new modifications to reciprocal tariffs in the agricultural industry.
Sources:
www.instituteforenergyresearch.org
The United States gets
78 percent of heavy-duty trucks from Mexico and
15 percent from Canada.
Source: www.instituteforenergyresearch.org
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