July 23, 2025 • General
As August 1st approaches, our team at FSL readies for President Trump’s impending tariffs. Talks between various countries are expected in the approaching days. For instance, we’ve seen recent developments like the US-China trade agreement, with other countries priming for deals as well. While we remain vigilant of all incoming updates, here are the effects we prepare for come August.
Decrease on Cross-Border Shipments
Both Canada and Mexico are due tariffs of 35% and 30% respectively on August 1st.
There has already been an impact on cross-boarder shipments between Canada with the current 25% tariff on some Canadian goods and 50% tariffs on aluminum and steel imports. Canadian Prime Minister Mark Carney holds firm against a deal, so we watch for decreased demand on shipments across the Canadian border.
As for Mexico, a 30% tariff awaits, but President Claudia Sheinbaum hopes to negotiate and reach a deal before August 1st. We can remain hopeful, but it’s also important to prepare for the tariffs regardless. If negotiations do not go as planned, the US may see retaliatory tariffs or a shift toward other suppliers of major US exports like corn, soybeans, and pork. This can result in a squeeze on outbound shipments to Mexico.
We wait for talks between both nations to know the true outcome of cross-border shipments once August 1st arrives.
Manufacturing Costs Increase
Manufacturing costs are at risk of increasing as tariffs on major components like copper loom. Trump announced a 50% tariff on imported copper, inducing an increase in copper prices by 13%. As copper is used in the manufacturing of cars, electronics, appliances, and more, the increase in product prices across these industries appears imminent. Along with the current tariffs on imported steel and aluminum, levying tariffs on imported copper will only further increase higher manufacturing prices. Of course, increased manufacturing prices will then increase retails prices for the consumer.
Now, only time will tell how American consumers will react to these price hikes.
Reliance on Intermodal Transportation
Since April, when Trump put the initial pause on his planned tariffs, many shippers and manufacturers have built an inventory of product and material to withstand the tariff implementation. Warehouses across the country are full and warehousing costs have increased, as FSL had previously predicted.
Goods that would have been imported will now ship within the US from well-stocked warehouses. If shippers can adjust their schedules, they can reduce the cost to consumers by relying on intermodal freight transportation. The less time the product spends in warehouses the less that cost will get passed along to the consumer. Therefore, we are likely to see an increase in demand for intermodal rail freight so shippers can decrease their warehousing costs. As we’ve already seen a decrease in long-haul shipments, this spells a shift toward cheaper transportation options. Intermodal transportation is the logical next step in this trend.
For many reasons, we foresee an increase in intermodal transportation demand, with rail taking a bulk of the demand.
At FSL, we’ve been preparing for the end to the 90-day tariff pause since its implementation in April. While negotiations happen in the lead-up to August 1st, it’s important to prepare for all possible impacts. We’ve noted just a few, but we know there will be more to look out for as August arrives.
In the meantime, keep up-to-date with FSL by following us on LinkedIn. If you’re in need of a partner to tackle these impacts together, contact us today.
