Trucking Industry Threatened by Escalating U.S.-China Trade War

May 15, 2019 by Alan Adler, @AlanAdler

A protracted U.S.-China trade war and additional tariff increases threaten business conditions for trucking, an industry already showing signs of slowing.

Trucks are the main transportation for most foreign goods arriving at the large West Coast ports in Los Angeles, Long Beach and Oakland. Higher tariffs mean fewer ocean shipments, less port activity and the need for fewer drivers to haul that freight to distribution centers.

PresidentDonald  Trump raised tariffs to 25 percent from 10 percent on $200 billion of Chinese imports to take effect June 1.

“The U.S. economy is going to slow down, and that is going to spill over into trucking,” Ryan Sweet, director of real-time economics for Moody’s Analytics, told

Up to 7 percent of container volume coming from China could be affected by the tariffs, according to DAT Solutions, which tracks freight prices.

“Pending orders for new trucks could be canceled if the tariffs remain in place through the end of the year,” said Avery Vise, vice president of trucking research at FTR Transportation Intelligence.

“The more uncertainty, the less excited carriers get about committing to equipment,” Vise said.


Motor carriers added to their fleets last year to take advantage of a robust economy. A reduction in business taxes provided the funds to place record orders for new trucks.

“Things driving freight growth like the tax cut are starting to abate,” said Kenny Vieth, president of ACT Research.

Although freight demand is still rising in some sectors of trucking, rates are falling. Freight carried in conventional trailers rose 2.4 percent in April compared with the same month a year earlier, according to DAT Solutions. But the rate fell 35 cents to $1.81 per mile year over year because more trucks were available. That gave shippers leverage in negotiating lower prices.


The near- to mid-term impact of higher tariffs is predictable, especially at West Coast ports, Sweet said.

“As the economy slows down, trucking is going to feel it because businesses hunker down and cut back on investment and production and lay off workers,” he said.

The tariff increases originally were targeted for Jan. 1. That led Chinese exporters to rush shipments planned for this year into the last three months of 2018 so they could avoid paying the higher tariffs.

Companies held extra inventory at port parking lots while waiting for trucks that could move it to distribution centers, said Erik Malin, vice president of operations for Loadsmart. Loadsmart prices and books truckload shipments.

A lot of the inventory from those shipments is still in warehouses near the ports. Trucks moving those goods this spring will help offset the impact of the higher tariffs, said Eileen Hart, a DAT spokeswoman.


The most widely purchased products Americans buy from China — clothes, shoes, toys and electronics – are part of $300 billion in goods on a proposed list for yet another round of higher tariffs. But companies are unlikely to rush shipments of those goods to beat proposed higher tariffs.

“Shippers may decide not to tie up cash in extra inventory this time around, especially with it being the slow season,” Malin told

Cargo ships that left China by May 10 can pay the 10 percent tariff on their loads. Later shipments will pay the 25 percent tariff.


Imports from European countries initially would pick up the slack from fewer shipments from China, Vise said. Small markets in Asia cannot match the volume of Chinese exports, at least not right away.

More shipments to the ports of New York and New Jersey could be good for trucking because they are close to major Midwest markets. Many cargo containers arriving in the West travel the greater distance to the Midwest by rail.

Editor’s note: An earlier version of this story incorrectly identified Erik Malin.

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4 Responses

  1. Jennifer Bisani

    Thanks to what the president thought was a good plan to catch China’s husband is potentially going to lose his trucking business, claim bankruptcy and there goes our American dream to buy a home. Really stimulating to the economy genius!!!American people deserve it for voting for an arrogant narcissism who has an IQ of a chimp in office. I am not saying China is a fair player but just like the government shutdown which led low-middle class working Americans, to lose their paychecks so he can build a wall on the expense of American taxpayer dollars, did not work neither will this!! We are not wealthy or rich like him and his circle of crooks and loss of pay for a short while will put us and our families on the street! Thats our reality along with 97% of the country!!!!

    • Raman Gill

      Trust me, I know a driver that is basically working for free at $1.50 to $2.00 per mile and breaking even after his $5,000 truck payments. A lot of drivers rushed in the industry very excitedly because importers ordered a lot of goods and the economy was hot before tariff announcements. Then due to tariffs announcements, people rushed orders again. Everything that goes up comes down. I heard of truckers/owner operators making $5-6 per mile. Shit I will be a trucker at that rate. Eventually, this will make United States less reliant on foreign manufacturers. We should evolve from this. Jennifer you should study a little bit of economics. Manufacturing is a symbol of wealth. We are losing that to China, and China plays unfairly. Remember they need us more than they we need them. Look you can’t your point finger at Trump. If that is the case then point the finger at Elon Musk he is coming out with self driving trucks and so is Uber. That will take away jobs eventually. I understand your frustration and am sympathetic towards your struggles. Trump understands that well and we will succeed in the long run. God Bless Donald Trump.

      • Les Ciapponi

        First of all the tariffs are doing so much to hurt our economy you have no clue. Just like the fake president has no clue. Try researching a little bit more. Manufacturing has been gone from America for a long time. In terms of what it originally was and how vital it was to our growth and economy.

  2. Michael

    Tariffs are good but where do they stop and at what expense to the economy. Yes farmers are effected as we have all heard but what about a trucking industry that has help push the economy. Since January of 2019 over 350 small trucking companies umder 25 trucks have shut down. How many more will suffer to the tariffs and where will he their help in a time of need.


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