Topics: Transportation Industry, Trade Policies, Economic Shifts, Tariffs, Carrier Newsletter
Oprah coined a catchphrase in 2004 when she exclaimed, “You get a car! You get a car!” The audience, of course, went wild. That historic TV moment probably wouldn’t be possible today, particularly if tariffs had to be paid on those 276 cars.
Tariff headlines are again stealing the spotlight from feel-good, pay-it-forward stories. In our early-August newsletter for carriers, Cass Information Systems is bringing you the latest on the tariff front, as well as proposed federal regulations that could impact carriers.
Trade Policy
Universal Tariffs Set to Take Effect
President Donald Trump announced that beginning August 7, the United States will impose a 10% universal tariff on imported goods from nations it has a trade surplus with and a 15% levy on imports from about 40 countries with which it has a trade deficit.
CNN said the new tariffs on more than 60 U.S. trading partners are the highest since 1933.
Trump earlier had said he would likely implement a blanket tariff of between 15% and 20% on goods from countries that had not negotiated individual trade agreements with the United States.
“We’re going to be setting a tariff for essentially the rest of the world, and that’s what they’re going to pay if they want to do business in the United States, because you can’t sit down and make 200 deals,” Trump said.
The tariffs could actually be far more than 15%. According to the president’s executive order, for example, if U.S. Customs and Border Protection determines goods were “transshipped to evade applicable duties,” those imports would be hit with a 40% tariff as well as penalties and fees.
Canada Gets Hit With 35% Tariffs
President Trump has singled out Canada from his universal tariffs, instead upping the ante and levying a 35% tariffs on imports from the United States’ northern neighbor beginning August 1.
As with the universal tariff, Canadian imports that are transshipped to avoid the 35% levy will be penalized with a 40% tariff.
Canadian imports that are not part of the United States-Mexico-Canada Agreement (USMCA) had been subject to a 25% tariff since early March. Canada responded with a 25% tariff on certain U.S. goods and matched U.S. tariffs on steel, aluminum, cars, and auto parts.
Trump last month threatened the 35% tariff on Canadian goods, telling reporters, “We haven’t really had a lot of luck with Canada. I think Canada could be one where there’s just a tariff, not really a negotiation.”
European Union Agrees to 15% Tariffs
The president has had better luck negotiating with the European Union, which agreed to the United States’ 15% tariff on most of its exports, including automobiles and semiconductors. The EU also has agreed to buy $750 billion in U.S. energy exports over the next three years.
The two sides also agreed on “zero-for-zero tariffs” on what were deemed strategic products, including aircraft and component parts, certain chemicals, some agricultural products, and natural resources and critical raw materials.
“This deal provides a framework from which we will further reduce tariffs on more products, address non-tariff barriers and cooperate on economic security, because when the European Union and the United States work together as partners, the benefits are tangible on both sides,” European Commission President Ursula von der Leyen said.
Trump Could Extend China Tariff Truce
The president could extend the 90-day tariff pause on imports from China that is slated to expire on August 12.
Treasury Secretary Scott Bessent told CNBC that if an extension is not granted, tariffs on Chinese goods levied in April would be implemented again.
“We call it boomeranging,” Bessent said.
In early April, Trump said he would impose a 34% levy on all Chinese imports. A week later, the president said he would jack up the tariffs on China to 125%. China and the United States then agreed to a tariff pause in May after a trade meeting in Switzerland.
Paccar Expects $75M Tariff Impact in Q3
Truck manufacturer Paccar expects a $75 million impact from tariffs in the third quarter of 2025.
Components for Paccar trucks come from Mexico, Canada, Asia, South America, and Europe. CEO Preston Feight said Paccar has been working with suppliers to source the maximum amount of parts certified under USMCA. The company also has adjusted pricing strategies, adding a tariff surcharge in the United States and Canada, Trucking Dive reported.
Truck manufacturers are awaiting the results of a U.S. Section 232 investigation into the imports of medium- and heavy-duty truck parts.
Feight said clarification of Section 232 trade policies “could enhance market clarity, as well as benefit Paccar and our customers.”
Federal Regulations
EPA Proposes Rollback of Truck Emissions Rules
The Trump administration has taken action to roll back the Greenhouse Gas Phase 3 rule.
The proposal calls for the removal of all Biden- and Obama-era greenhouse gas standards for light-, medium- and heavy-duty vehicles and heavy-duty engines, starting with the Environmental Protection Agency’s first greenhouse gas regulations set in 2010 for light-duty vehicles and those set in 2011 for medium-duty vehicles and heavy-duty vehicles and engines.
“With this proposal, the Trump EPA is proposing to end 16 years of uncertainty for automakers and American consumers,” EPA Administrator Lee Zeldin said. “In our work so far, many stakeholders have told me that the Obama and Biden EPAs twisted the law, ignored precedent, and warped science to achieve their preferred ends and stick American families with hundreds of billions of dollars in hidden taxes every single year. We heard loud and clear the concern that EPA’s GHG emissions standards themselves, not carbon dioxide which the finding never assessed independently, was the real threat to Americans’ livelihoods.”
The Commercial Carriers Journal said the Clean Freight Coalition, American Trucking Associations (ATA), and Truckload Carriers Association were among the industry stakeholders that “opposed GHG3 and its reliance on zero-emissions technologies that are currently both unproven and expensive.”
Trucking Groups Push for Federal Funds for Parking
Representatives from the ATA and Owner-Operator Independent Drivers Association (OOIDA) urged a Senate subcommittee to include $755 million for commercial truck parking spots in the next Surface Transportation Reauthorization Bill.
“With research indicating there is a single parking spot available for every 11 trucks on the road, the lack of available spaces is forcing truckers to choose between parking in a potentially unsafe location, such as a highway shoulder, or continuing to drive while they feel fatigued or are out of available driving hours under federally mandated HOS regulations,” OOIDA EVP Lewie Pugh said.
If approved, the $755 million would be allocated through a competitive grant program.
Senate Committee Hears Impact of Cargo Thefts
A Senate Judiciary Committee was told retail crime has evolved from shoplifting and smash-and-grabs to organized cargo theft.
“This threat has evolved to our supply chains, exposing significant vulnerabilities,” Sen. Chuck Grassley, sponsor of the Combating Organized Retail Crime Act, said.
Cargo theft rose 27% between 2023 and 2024, with estimated losses of more than $1 billion. But with a “decentralized organization approach to law enforcement” in the United States, according to the Journal of Applied Security Research, it’s difficult to get precise crime statistics. The bill would help by providing for “collaborative investigations” across jurisdictions, Grassley said.
Donna Lemm, IMC Logistics’ chief strategy officer, told the committee that “cargo theft is robbing our supply chain to the tune of $35 billion per year.”
Finance
Heartland Express Posts Q2 Operating Loss
Although Heartland Express had a $10.9 million net operating loss in the second quarter, the result was a sequential improvement from a $13.9 million loss in Q1.
CEO Mike Gerdin said in an earnings news release that tariff actions and economic uncertainty, “coupled with what we perceive as unsustainable pricing in many markets and rising operating costs, continue to be a significant headwind for us and all of those operating in our industry.”
Heartland Express’ Q2 operating revenue decreased about 23% year over year from $274.8 million to $210.4 million.
“While we have begun to see some encouraging signs within current freight demand and customer pricing, we do not expect material improvements until later in 2025 and a resulting positive impact to future financial results and an improved freight outlook in 2026,” Gerdin said.
Knight-Swift’s Truckload Profits Grow Despite Revenue Drop
Knight-Swift Transportation Holdings’ truckload segment made major gains in the second quarter, while the less-than truckload business saw a significant drop.
Second-quarter truckload operating income shot up 93.4% year over year, from $23.5 million to $45.4 million. LTL operating income dropped 44.5% from $33 million to $18.3 million.
Knight-Swift’s total consolidated operating income climbed 14.5% year over year to $72.6 million, but operating revenue decreased 23% to $210 million.
“Overall, most segments experienced pressure on revenue year over year with a soft freight environment,” CFO Andrew Hess said on a Q2 earnings call.
Technology
DAT Acquiring Convoy’s Tech from Flexport
DAT Freight & Analytics is acquiring the former Convoy’s technology from Flexport.
Flexport acquired the technology and related intellectual property in October 2023 after Convoy folded. It launched the Convoy Platform freight-matching service for brokers in April 2024. DAT said it will add automation and digital freight-matching technology to its product portfolio with the acquisition.
“Together, we will give customers a better, broader freight-matching network, the ability to manage more loads and capture incrementally more business, and ultimately more choice,” DAT President and CEO Jeff Clementz said.
Over the past year, DAT also has acquired Trucker Tools, a provider of load visibility, automated booking, digital freight matching, and carrier engagement services, and Outgo, a fintech and factoring service.
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