Tariffs against Canada, Mexico could harm air cargo industry

DALLAS — The longer the new trade war between the United States and its three largest trading partners — China, Canada and Mexico — drags on, the more detrimental it will be to the air cargo industry. That’s what experts at the AirCargo Conference 2025 said March 3. [caption id="attachment_57149125" align="aligncenter" width="1920"] Panelists discuss the new U.S. administration during the panel 'Navigating new policies: Expert insights on the future of freight and logistics under the new administration' at AirCargo Conference 2025 in Dallas. (Photo/Cargo Facts)[/caption] Following a thirty-day delay for negotiations, the U.S. implemented 25% tariffs on goods from Mexico and Canada today. In addition, President Donald Trump doubled tariffs on products from China. Canadian Prime Minister Justin Trudeau said his country would respond by levying tariffs worth about $107 billion on U.S. products. Mexican President Claudia Sheinbaum said today she will announce retaliatory tariffs Sunday. The 25% tariffs pertain to all imports from the neighboring countries. The only exception is energy and energy resources from Canada, which are subject to a 10% tariff. The tariffs were originally announced Feb. 1 and postponed Feb. 3 from an initial implementation date of Feb. 4. The U.S. imposed a 10% tariff on all goods from China on Feb. 4. That was raised to 20% today. Experts weigh in “I think protectionism in a very short term can be effective, but over a protracted period of time is exceptionally problematic,” Cameron Roberts, managing partner at law firm Roberts & Kehagiaras, said at the AirCargo Conference on March 3. “The Great Depression was exacerbated dramatically by tariffs. It did not protect and grow American industry; it had a contrary effect. It shrunk the American economy when we needed it to grow.” Roger Libby, DHL Group’s head of corporate and public affairs for the Americas, said Canada, Mexico and China have three choices: “Just take it and don’t do anything”; Impose retaliatory tariffs; or File a complaint with the World Trade Organization and “see if twelve years from now they issue a resolution and nothing will happen.” “We should be just outraged over this,” Brandon Fried , executive director of the Airforwarders Association, which co-hosts the AirCargo Conference, said. Follow the money The tariffs are being imposed to stem the flow of illegal opioids into the U.S. from Canada, China and Mexico, according to Feb. 1 executive orders, and will be removed if Trump determines that the countries have taken “sufficient action” to curtail the movement of opioids into the U.S. Many analysts last month said the executive orders and subsequent postponements for Canada and Mexico were issued as a hardball negotiation tactic. But some analysts are now attributing the tariffs to other motives, noting that the drug angle does not make sense to them. While 86% of illicit drugs enter the U.S. from Mexico, the majority comes from passenger traffic and 60% of the traffickers are U.S. citizens, Cindy Allen, CEO and managing director of consultancy Trade Force Multiplier, said during a panel at the event. And the quantity of illicit drugs coming in from Canada is quite small, she said. “I really do think you have to follow the money,” Allen said. “We have a tax bill coming out that’s being negotiated, and one of the sticky points is how much money it’s going to take to forward the tax cuts.” The tariffs also appear to be a punitive step in a trade deal process, Michael Taylor, managing partner at Austin, Texas-based Diakon Logistics and senior lobbyist for the Airforwarders Association, said during the panel. “What these tariffs are really doing is meant to sort of punish a trade partner, get them to submit by [showing] that you’ll outlast them in the pain department,” Taylor said. Libby said the tariffs are also being used to: Protect industries such as steel and aluminum manufacturing; Raise revenue; and Address a trade imbalance. Not everyone is convinced that there are multiple reasons for the tariffs. “To me, it’s all about the revenue,” Allen said. ‘Historic level’ of regulatory uncertainty Said Diakon’s Taylor: “We are entering what I would characterize as an historic level of uncertainty in the regulatory world. You're going to have a lot of volatility and a high level of uncertainty, and your ground can be taken out from under you because of one tweet or one court case or whatever it might be.” That uncertainty is compounded by mass firings, specifically of those who have expressed reservations about some of Trump’s plans, Roberts, of Roberts & Kehagiaras, said. “What we’ve seen over the last month is anyone who said, ‘No’ or ‘Hey, we can’t really do that effectively’ or ‘Here’s five reasons why that’s not going to work’ ... those people are gone,” Roberts said. This has led to “gutted” federal advisory committees and poor communication from government agencies that no longer have the staffing to respond to inquiries, Roberts said. No government agencies attended this year’s conference — a first for the event, Fried said. Communication won’t be the only casualty, panelists agreed. “There will be safety impacts because of these cuts ,” Taylor said. “Everything’s going to take you longer in terms of certifications, rulings, and it’s going to be a hard time to get anybody in the office to be able to act on things. And that’s a real concern.” Register now for Cargo Facts' essential regional events for industry stakeholders: Cargo Facts Asia 2025 on March 24-26 at the W Shanghai in China; and Cargo Facts EMEA 2025 on May 6-8 at the Shangri-La Bosphorus in Turkey.

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