In April 2025, the global trade landscape experienced a major shift as the Trump administration announced what economists are calling the most significant tariff measures since the 1930s. For SMB importers and exporters, these changes could have major ramifications.  

Read on to understand what’s been announced, potential effects, and some steps you can take to mitigate the impact. 

Understanding the New Tariff Structure

The newly announced measures employ a multi-layered approach that will affect virtually all international trade. Here’s the breakdown:

Global tariffs: A baseline 10% tariff will apply to goods from countries that not subject to reciprocal tariffs. This affects all merchandise not in transit by April 5th.

Reciprocal tariffs: Country-specific duties calculated based on trade imbalances with the US will range from 11% for Congo to a staggering 50% for Lesotho. For China, the rate will be 34%, which, when added to existing tariffs, brings the total to 54%. And for specific Chinese goods already targeted by other tariffs, the rate could reach higher than 70%. 

Since the initial announcement, Trump has announced a temporary 90-day pause on reciprocal tariffs for many countries. 

De minimis suspension: The $800 duty-free threshold for small packages from China will be eliminated starting May 3rd, requiring formal entry filing, fees, and applicable tariffs for all Chinese imports regardless of value. Read more on de minimis here. 

Significant tariffs on China sourcing alternatives: For SMBs that have previously relied on diversification strategies like “China+1” to mitigate tariff risks, the new landscape presents additional challenges as alternative manufacturing hubs will also face significant tariffs:

• Vietnam: 46%
• India: 27%
• Bangladesh: 37%
• Cambodia: 49%

Canada and Mexico: Canada and Mexico are exempt from the new global and reciprocal tariffs, but they still face a 25% tariff on non-USMCA goods and on the non-US parts of automotive imports. Both countries have indicated they will implement retaliatory tariffs despite these partial exemptions.

Exemptions for value created in the US: Imports containing at least 20% US-originated value will only pay tariffs on the non-US portion of the goods. Additionally, certain sectors are exempt from the new tariffs, including steel, aluminum, copper, pharmaceuticals, semiconductors, lumber, specific critical minerals, and energy products, though the president has expressed interest in potentially applying sectoral tariffs to some of these categories in the future.

Economic Ripple Effects of Tariffs on SMBs

No one knows yet what the tariffs will cause, but here’s what the experts are predicting:

Slowing economic growth

Most economic forecasts predict these measures will contribute to slower US GDP growth and an increased risk of recession. As import costs rise substantially across nearly all product categories and source countries, lowered consumer spending and dampened economic growth could follow.

Inflation pressure

The widespread nature of these tariffs means virtually no imports will be spared from price increases. These increased costs will largely be passed on to consumers, potentially accelerating inflation rates a when many businesses are already struggling with elevated costs.

Retaliatory measures

Several major trading partners, including the European Union, Canada, China, Japan, and South Korea, have already announced intentions to implement retaliatory tariffs. These countermeasures would create additional obstacles for US exporters, and could reduce reducing demand for American goods in international markets.

The Impact of Tariffs on Freight

Here’s how these tariff changes could impact your shipping in the months ahead:

Air cargo disruption

The suspension of the de minimis exemption for Chinese goods is already impacting air cargo patterns. Major Chinese e-commerce platforms have begun shifting manufacturing to other countries, increasing ocean shipping usage, and investing in fulfillment capabilities closer to the US market. 

In the short term, we can expect:

• A surge in air cargo demand just before the May 3rd implementation date
• Potential congestion and higher rates in April
• A likely sharp decline in China-US air cargo volumes and rates after implementation
• Possible redistribution of air capacity to other routes, affecting global rate structures

Ocean freight volatility

The container shipping market will likely follow a similar pattern of pre-implementation surge followed by potential decline:

• Brief but intense demand spike before the April 9th reciprocal tariff deadline
• Subsequent volume decreases as importers work through frontloaded inventory
• Downward pressure on container rates due to reduced demand
• Potentially subdued peak season similar to what occurred following the 2018 tariff implementation

The combination of tariff-induced trade slowdown and existing overcapacity in container shipping could lead to low container rates in some markets, creating a potential opportunity for businesses that can plan strategically.

Strategic Recommendations for SMBs

While these tariff changes present significant challenges, here are some steps that can help:

1. Conduct a comprehensive tariff analysis

Understand exactly how the new tariff structure affects your specific products and sourcing countries. Reach out to your freight forwarder or customs brokers to identify potential exemptions or strategies to minimize impact.

2. Explore domestic alternatives

With tariffs making imports significantly more expensive, sourcing components or finished products domestically may become more cost-effective for some categories. Evaluate reshoring opportunities if relevant or partnerships with US-based suppliers.

3. Leverage the US value created exemption

The new tariff rules include an important provision: imports with at least 20% US-originated value will only pay tariffs on the non-US portion. This creates an opportunity to restructure supply chains to incorporate more US components or processing.

4. Optimize inventory management

The uncertainty created by these tariffs makes precise inventory management more critical than ever. Look into the following:

• Implementing more sophisticated inventory forecasting tools
• Developing contingency plans for supply disruptions
• Working with your warehouse partner to coordinate delivery times to avoid delays and unnecessary fees

Looking Ahead

One thing we’ve learned about tariff announcements is that they are sure to be followed by adjustments and further changes. The entire industry is navigating the uncertainty and difficulty of this period and we will keep you updated as the changes unfold.

Click here for a more in-depth look at these changes.