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Trump’s Tariff Threat to Top US Trading Partners Roils Markets
By Nancy Cook and Brian Platt Source: Bloomberg
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- President-elect cites flow of drugs, people across US borders
- Republican has vowed to tighten border security in second term
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President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the US’s top trading partners since his election win three weeks ago.
Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada, in posts to his Truth Social network on Monday.
The US dollar staged a broad advance Tuesday, with the Mexican peso and the Canadian dollar among the worst performers. US Treasuries fell, with the yield on 10-year notes rising two basis points to 4.3%, partially reversing the reaction to Scott Bessent’s nomination last week as Treasury secretary, which weighed on the dollar and boosted US bonds amid optimism of a more measured approach to trade relations.
Trump’s market-moving threats were a stark reminder that he plans to wield tariff authority, or at least threaten to use it, as leverage against allies and adversaries alike. It’s another sign of his break from the international order where low tariffs are the goal and rules exist to discourage overreach of punitive trade actions.
In his Truth Social posts, Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders.
He accused China of failing to follow through on promises to institute the death penalty for traffickers of fentanyl, writing that “drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”
“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.
In another post, the incoming president also vowed to hit Mexico and Canada with a 25% tariff on “ALL products,” saying he would sign an executive order to that effect on his first day in office.
“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” he said. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
Shortly after Trump’s post, Canadian Prime Minister Justin Trudeau contacted the president-elect and the two leaders had a phone call to discuss border security and trade, according to a government official with knowledge of the matter.
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Immigration Response
Trudeau pointed out to Trump that the number of migrants who cross the Canadian border into the US is minuscule compared to those who cross from Mexico, said the official, who spoke on condition of anonymity.
Canada said it’s working closely with US law enforcement agencies every day to disrupt the “scourge of the fentanyl coming from China and other countries,” according to a statement by Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.
Liu Pengyu, spokesman for the Chinese embassy in the US, said economic and trade cooperation between both countries is mutually beneficial. “No one will win a trade war or a tariff war,” he wrote in an X post.
The Foreign Ministry in Beijing said in a statement Tuesday that China has provided support to America’s fight against fentanyl which is “US’s problem,” though it stopped short of mentioning any planned trade retaliation.
Representatives for the Mexican Foreign Affairs Ministry and Economy Ministry, as well as China’s Commerce Ministry, didn’t immediately respond to requests to comment. Spokespeople for Trump didn’t immediately answer a question about whether there would be exemptions from the duties.
UBS Global Wealth Management’s Kelvin Tay says the announcement of additional trade tariffs on China is not surprising. He adds that the next round of tariffs will “likely be more nuanced” as some Chinese exports to the US are hard to substitute.
Trump campaigned on pledges to implement sweeping tariffs, vowing to hike tariffs to 60% for all goods imported from China and as high as 20% for those brought in from the rest of the world — policies he says will help pressure companies to re-shore manufacturing jobs in the US and raise revenue for the federal government.
President Joe Biden has already hiked tariffs on a variety of Chinese imports this year, including semiconductors, solar cells and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The move was the culmination of a review of Trump’s tariff increases in his first term — none of which were rolled back.
While it was unclear how Trump’s 10% tariff threat on China fit in with his previous statements calling for even higher duties, analysts saw this as an opening gambit aimed at the drug problem.
China’s Response
This “does not necessarily mean that Trump’s promised 60% tariffs on all Chinese imports are off the table,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “China will register its opposition and consider limited retaliation but is likely to respond cautiously at first to Trump’s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term.”
While public health experts say fentanyl overdoses remain a major issue, provisional data released earlier this month by the Centers for Disease Control and Prevention showed a 14% drop in drug overdose deaths from June 2023 to June 2024. President Biden hailed US-China cooperation on counter-narcotics this month during a meeting with counterpart Xi Jinping in Peru.
Higher North American tariffs would upend the auto industry and other consumer sectors, including food, in which the three countries are highly integrated.
Mexico’s auto sector is particularly exposed to a trade conflict with the US, along with factories that export electronics, plastics and other manufactured goods to US consumers. Mexico became the US’s largest trading partner as China’s import share declined in recent years. The Mexican government estimates there’s now $800 billion annually in total trade between the nations.
‘Stir the Debate’
The Canadian and US auto industries are so intertwined, and work on such thin profit margins, that a 25% tariff is “not a real conversation,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, a Canadian industry group.
“The president-elect has done what he’s famous for, which is try to stir the debate. The only surprise is how early he’s done it,” Volpe said. “What we learned in the first term was he uses strong rhetoric, public rhetoric. But the negotiations are always tough, but reasonable — and I’m just telling everybody to be patient.”
Canada’s Exports to the US
Energy, motor vehicles and consumer goods account for 57% of exports
Source: Statistics Canada, Bloomberg calculations
A 25% tariff applied to all imports from Canada would put pressure on energy costs. Oil, gas and other energy products are Canada’s largest export to its southern neighbor; it’s by far the largest external supplier of crude to the US. Wilbur Ross, Trump’s former Commerce secretary, said earlier this month it would make no sense to place tariffs on Canadian energy.
The move on Mexico and Canada would reignite a trade feud that simmered across the continental bloc during Trump’s first term, where he forced a renegotiation of the North American Free Trade Agreement and imposed tariffs on certain sectors, including steel.
Currently, the re-branded trade pact, known as the United States-Mexico-Canada Agreement, allows for duty-free trade across a wide range of sectors.
It’s not clear what recourse American importers, who would pay the duties, would have under the pact to head off any levy.
Beyond Bessent, Trump still has a number of top economic roles to fill in his administration. One of the chief architects of Trump’s tariff agenda, former United States Trade Representative Robert Lighthizer has yet to land a role in the second term.
— With assistance from Constantine Courcoulas, Josh Wingrove, Matthew Burgess, Carolina Millan, Maya Averbuch, Colum Murphy, Jing Li, Josh Xiao, Philip Glamann, Cormac Mullen, and Derek Decloet
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BOC & End Hunger New EnglandMeal Packing Event
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One Shipment = One Meal.
This past week, our team partnered with End Hunger New England for a meal-packing event focused on helping those facing food insecurity. It was a hands-on opportunity to give back and work toward a shared goal of ending hunger in our communities.
Thank you to End Hunger NE for leading this important initiative and to everyone who participated.
As part of our commitment, for every BOC shipment, we will provide a meal to someone in need: One Shipment = One Meal.
When you work with us, you’re not just shipping—you’re giving back. Let’s continue to make a difference, one shipment and one meal at a time.
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Canada’s Labor Minister ends coast-to-
coast port labor turmoil, forcing unions back to work
from: Lori Ann LaRocco – CNBC.com
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Key Points
- The Canadian Labor Minister Steven MacKinnon has used federal powers to force union workers back to the docks, the second time this year he has effectively ended strikes and lockouts.
- Work stoppages hit the ports of Vancouver, Prince Rupert and Montreal in recent weeks, and congestion of cargo containers will take weeks to clear out.
- $572 million in container trade arrives daily in the U.S. from Canada, according to U.S. Census data.
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Canadian Labor Minister Steven MacKinnon has invoked federal powers to end work stoppages at the ports of Vancouver, Prince Rupert and Montreal, ordering binding and final arbitration between labor unions and ports ownership.
Strike actions by unions and ports ownership lockouts had hit both coasts of the key U.S. northern trade partner. Vancouver and Prince Rupert have been shut down since November 4, while Montreal dockworkers were locked out by ports management on Monday.
But the damage to the supply chain has been done, and will it take weeks to clear out the container congestion bound for both Canadian and U.S. companies.
“The disruption these disputes caused to retail supply chains were severe, and all at our busiest time of the year,” the Retail Council of Canada said in a statement to CNBC. “The ripple effects will continue to be felt. It will take weeks for our sector to recover but Canadians can rest assured that they will continue to get all their essential retail goods in the days ahead.”
Trade to the United States will take weeks to recover as well. Approximately 20% of U.S. trade arrives in the Canadian ports of Vancouver and Prince Rupert, where strikes broke out after union leadership and industry representatives failed to reach a deal before a cooling-off period expired. The ILWU Local 514 contract expired on March 31, 2023, with 96% of union members voting in favor of a strike in September.
According to the U.S. Department of Transportation, rail cross-border trade between Canada and the U.S. accounted for 14% of total bilateral trade of $382.4 billion in the first half of the year. Approximately $572 million in container trade arrives daily in the U.S. from Canada, according to U.S. Census data.
Stephen Lamar, CEO of the American Apparel & Footwear Association, told CNBC it is relieved operations will resume at Canada’s three busiest ports and hopes a long-term, mutually beneficial agreement comes out of the negotiations. “The lockouts of the Canadian ports were causing ships to divert and contributing to congestion and delays throughout North America.
As Canada faces reduced rail capacity from mandatory winter train length safety restrictions, and the U.S. West Coast faces two-year high rail dwell times, further disruptions would greatly strain the transportation networks,” Lamar said.
At a press conference, MacKinnon said that negotiations had hit a “total impasse” and the measure was needed to avoid any economic and reputational damage to Canada.
“If these work stoppages go on, the impacts will only worsen, and our well-earned reputation for reliability will be put at risk because of these impasses, more than $1.3 billion in value of goods is affected every day,” said MacKinnon.
This is the second time Mackinnon has stepped in to stop a strike in recent months. Under section 107 of the Canada Labor Code, the Labor Minister can order binding arbitration to end labor disputes. In August, he ended the lockouts at Canadian Pacific Kansas City and the Canadian National Railway Co. by referring negotiations to the Canada Industrial Relations Board.
Existing collective agreements will remain in place pending a new deal being reached between dockworker unions and the ports.
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Talks break off in B.C. port dispute as
bid to end multi-day lockout fails
Excerpted from Toronto.CityNews.ca, November 9, 2024
By Chuck Chiang, The Canadian Press
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VANCOUVER — Contract negotiations in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday have been called off.
In an update posted to their website on Saturday night, the BC Maritime Employers Association says they and the International Longshore and Warehouse Union Local 514 met separately with the Federal Mediation and Conciliation Service (FMCS) and “there was no progress made.”
As a result, no further contract talks are scheduled.
“The Parties met separately with the FMCS and, based on the discussions that transpired, there was no progress made. On that basis, the FMCS concluded the mediation, and no further meetings are scheduled,” the employers said in a release.
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Employers at Canada’s Port of
Vancouver to lock out workers as
deadline passes
From: reuters.com
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Key Points
- The BC Maritime Employers Association will lock out workers at Canada’s Port of Vancouver, affecting over 700 foremen, due to failed labor negotiations.
- The B.C. ports dispute is occurring at the same time as a strike at the Port of Montreal, which affects about 40% of its container flow and 15% of total port freight.
- This lockout could disrupt the export of key goods, including coal, potash, and beef, with bulk-grain shipments exempted from the impact.
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WINNIPEG, Manitoba, Nov 4 (Reuters) – The BC Maritime Employers Association said it would lock out workers on Monday at Canada’s Port of Vancouver after a negotiating deadline passed, potentially disrupting exports of coal, potash and beef.
The association, which includes private-sector waterfront employers, said it would lock out foremen and other members of International Longshore and Warehouse Union Local 514 at the country’s largest port starting at 4:30 Pacific time (0030 GMT).
Port of Los Angeles freight rail delays
reach two-year high, with holiday and
everyday items piling up
From: CNBC.com
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Key Points
- Almost half of the containers bound by freight rail out of the Port of Los Angeles are waiting nine-plus days to get out of the port and onto the rail.
- Record September imports driven by the recent East Coast and Gulf Coast strike diversions and ongoing Red Sea issues have clogged up container rail yards at the nation’s busiest ports.
- Dwell times, or how long containers sit at ports, have spiked to a two-year high at Los Angeles and Long Beach, though port officials say operations continue to run efficiently.
Record imports over the last several months at West Coast ports, driven by the recent East Coast and Gulf Coast strike diversions and ongoing Red Sea issues, are leading to congestion on the rails, as holiday goods and everyday items pile up.
Almost half of the containers bound by freight rail out of the Port of Los Angeles are waiting nine-plus days to get out of the port and onto the rail.
Before the August and September container surges, the average rail dwell time, or how long a container sits at port, for the San Pedro Basin, which includes the Port of LA and Long Beach, was four days.
In September, the Port of Los Angeles moved a total of 954,706 twenty-foot equivalent units, or TEUs, making the month its best September ever. At the port’s monthly cargo briefing Friday, Executive Director Gene Seroka told CNBC there are currently 20,000 rail containers sitting at the port waiting to be loaded out, and he is speaking with the railroads on a daily basis about the increased dwell times.
But he stressed that the rail congestion is not leading to any additional issues at the port as far as vessel and trucking operations. “This is not impacting port operations,” said Seroka. “We want to make sure we improve on all port operations. The railroads continue to be our focal point.”
Seroka said he is monitoring three key factors related to future container growth and port ability to move all of the cargo efficiently: early Lunar New Year, the U.S. presidential election, and the strength of the economy, which currently continues to look strong based on the recent port volume data.
“October is shaping up to be another strong month,” Seroka said. “We see no precipitous signs of a pullback. We are looking at the mid-800-thousand [TEU] range. We have an early Lunar New Year. With tariffs, we may see an uptick of cargo in early to avoid those extra costs depending on the presidential outcome, and unemployment claims are down.”
Republican presidential candidate former President Donald Trump has continued to talk aggressively about new trade tariffs if he wins the election.
At the Port of Long Beach, the rail dwell times for containers are seven days, but the port is not experiencing congestion, Executive Director Mario Cordero told CNBC.
“Given our historic number of TEUs moving through [the Port of Long Beach] for the last three months, the current rail dwell is not of immediate concern,” Cordero said. “Port of Long Beach is not experiencing any congestion or bottlenecks, our operations are fluid. We are in a good position to receive continued record cargo given our current capacity.”
Cordero said there has been an increase of approximately 26% in on-dock rail movement.
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Insurance & Claims for Loss or Damage
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Did you know:
General insurance policies rarely cover marine cargo claims. You need a marine cargo insurance policy, or you may need to purchase marine cargo insurance on each shipment.
Many carriers will not take responsibility for loss or damage if a warehouse signs off clean on a POD. It is critical, before signing a POD, to note the condition of the cargo. Claims are usually time-barred, unless filed within a few days (standards vary by carrier). So alert your carrier to possible damage immediately. The best way to do this is by signing the delivery receipt notating damage! And be specific, for example, 8 glasses broken, 10 boxes crushed (Make ensure that you have the correct boxes or pallet count).
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, marine cargo insurance coverage minimizes your financial risk.
Don’t leave your livelihood up to chance!
Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you depend on the carrier to cover losses, their responsibility is very limited (by law), as follows:
Ocean Carriers $500 per shipping unit (a shipping unit may be defined as one ocean container)
Air Carriers $9.07 per pound
Truckers $0.50 per pound
The cargo insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative for your free quote.
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protect your investments by insuring your goods, and provide peace of mind.
According to internationally accepted trade terms, referred to as Incoterms, suppliers selling CIF are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to control the selection, and thereby, the quality, of insurance coverage.
Foreign suppliers and their forwarding agents often add on additional fees to the insurance costs. Those added fees inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from
BOC International.
Additionally, when other parties arrange insurance, you run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions.
At least make certain the insurer being used has a favorable financial rating supplied by a respected financial rating service. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Are you familiar with GENERAL AVERAGE?
There are a number of notable cases of damage or loss to a vessel, with many resulting in General Average! More recent examples include:
- Ever Forward, March 2022
- Ever Given, April 2021, stuck in the Suez Canal
- Yantian Express, January 2019
- APL Vancouver, January 2019
- ER Kobe, February 2019
- Sincerity Ace – January 2019
- Maersk Honam – March 2018
- Maersk Kensington – March 2018
- Hyundai Auto Banner – May 2018
- MOL Prestige – February 2018
- Caribbean Fantasy – June 2018
Ever Given – The claim process is still ongoing. The average time a case can take is two to seven years.
General Average claims can include a long list of expenses, including damage to the vessel, re-floating efforts, towing and salvors. Egypt alone believes it is owed more than $1 billion in the Ever Given case.
General Average – Background
- Basic principle – “that which has been sacrificed for the benefit of all shall be made good by the contribution of all”.
- Applies to maritime claims only.
- Is declared by the captain when there is imminent danger to the vessel, voyage or crew.
- You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs.
How does General Average work?
- Value of the voyage is determined (vessel value plus value of all cargo on the vessel).
- Participation in costs is determined by the percentage that the value of your cargo bears to the overall value of the voyage.
- The loss amount is determined, and participation percentage is applied, to the loss amount, to determine security deposit.
- Shipper/Consignee or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.
- Freight may not be released until ALL deposits/payments have been received by all parties involved.
Difficulties of preventing and extinguishing fires on the open sea, which increases the likelihood of a General Average claim, include:
- Ships are larger with more varied cargo.
- Crew are ill equipped to deal with these fires.
- Fire-fighting tugs are often days or weeks away.
- Prevention is difficult, with rising problems with mis-declared cargo.
- IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)
Problems Facing the Industry
- Stricter rules on Dangerous Goods cargo will lead to higher costs and more incentive on the part of shippers to avoid proper declarations.
- Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis.
- National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG.
General Average will (probably) never go away, so, keep yourself informed:
- Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.
- Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.
- Have a contingency plan or at least an understanding of how the event will unfold.
MAKE SURE YOU ARE COVERED! Ask the questions. Do not assume.
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ILA and USMX Reach Tentative Agreement to Extend Master Contract to January 15, 2025
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Overnight a tentative agreement has been made between the ILA and USMX. As of this morning the ports are back to work. If you have any questions about your cargo please feel free to contact your local BOC representative.
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International Longshoremen’s Association (ILA) Strikes Shutting Down East Coast Ports
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Around midnight on September 30th the International Longshoremen’s Association (ILA) went on strike. With this strike, ports from Maine to Texas have ceased operations. This affects 36 ports along the United States east coast and marks the first ILA strike in close to 50 years.
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Statement from the ILA:
International Longshoremen’s Association (ILA) Shuts Down All Ports On Atlantic and Gulf Coast On Oct 1st, As Strike Begins Against United States Maritime Alliance (USMX)
NORTH BERGEN, NJ. (October 1, 2024) The International Longshoremen’s Association shut down all ports from Maine to Texas at 12:01am on Tuesday, October 1, 2024, as tens of thousands of ILA rank-and-file members began setting up picket lines at waterfront facilities up and down the Atlantic and Gulf Coasts.
The ILA rejected United States Maritime Alliance (USMX) final proposal made on Monday, setting the stage for the first ILA coast wide strike in almost 50 years. The USMX last offer fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.
“USMX brought on this strike when they decided to hold firm to foreign owned Ocean Carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth,” said President Harold Daggett, the leader of the 85,000-member ILA union. “We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve.”
Even the leaders in Washington who encouraged the ILA and USMX to keep negotiations going up until the September 30th deadline, concluded on Monday that USMX and the greedy foreign companies they represent are only interested in protecting their fat revenues and not taking care of hard-working ILA longshore workers.
The ILA said USMX’s supposed wage increase offer fell far short of the demands of ILA rank-and-file members for them to ratify a new contract.
“USMX owns this strike now,” said ILA President Daggett. “They now must meet our demands for this strike to end.”
Contact: Jim McNamara, ILA. jmcnamara@ilaunion.org
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Current reports are stating that the Biden administration does not plan to invoke the Taft-Harley Act. The USMX did propose a offer yesterday that would include a 50% wage increase along with other benefits but was rejected by the ILA.
The USMX is made up of 13 members and three separate sets of representation. The ports, shipping associations and ocean carriers make up board.
We here at BOC will continue to monitor the ongoing negotiations and will provide updates as they become available. If you have any questions in regards to how your business is being affected please contact your local BOC representative.
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New Alliances in 2025 of Transpacific Trade
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Hapag-Lloyd and Maersk have signed a new long-term operational collaboration called “Gemini Cooperation,” which will begin in February 2025.
ONE, HMM, and YML are expanding their global coverage through the Premier Alliance, adding over 80 direct port calls. This cooperation will also start in February 2025.
ZIM has entered into a long-term operational partnership with Mediterranean Shipping Company (MSC) for services between Asia and the U.S. East Coast, as well as Asia and the U.S. Gulf. These new services will launch in February 2025.
The Ocean Alliance will remain unchanged until 2032.
Below is the service map for Premier, Gemini, and ZIM & MSC for your reference.
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ZIM & MSC Cooperation
Premier Alliance
Gemini Cooperation
