Mat: Welcome to the Robinson Roundup, our monthly series of critical issues impacting shippers. I'm Mat Leo, and as always, joined by my colleague, Ryan Hammett. Oh, Ryan, things have been, uh, say a little chaotic the first several weeks of the year, huh?

Ryan: Yeah, I think that might be an understatement, Mat: Winter weather storms have continually impacted a large portion of North America. There were wildfires out in California and lately US trade policy has been very active since the new administration took over a few weeks ago.

Mat: Yeah, and I think that has been the top consideration on everyone's mind recently. So, let's dive in a bit deeper onto that. Talk about what has been going on with trade and tariffs. Let's start by doing a recap and I know Ryan, you've been following this very closely, so how about you do the honors here? 

Ryan: Oh, well, thank you very much, sir. Um, so as most of you know by now, President Trump tapped the never used before International Emergency Economic Powers Act, which we've now come to know as IEEPA. To quickly announce proposed tariffs on Canada, Mexico, and China. Now, shortly following this, discussions were had between the US and the governments of Canada and Mexico, and ultimately, the 25% tariffs on our top two trade partners were put on hold until March 4th. This is pending development of both immigration and drug efforts by those countries.

Mat: And when the US initially announced these tariffs, I remember that Canada announced a retaliatory tariff of 25% to imports from the US moving north. So, are those tariffs still in place?

Ryan: Good question. The answer is no. All those tariffs are still on hold during this discussion phase. If the countries cannot come to a point of understanding related to the declared immigration and drug emergencies, then they will go into effect as of March 4th. Again, this is just for Canada and Mexico. The tariffs that the US implemented on China are in effect as they went into immediate effect on February 4th.

It's important to know that the tariff on imports from China is 10%, not the 25% that was initially imposed on Mexico and Canada, but this 10% is additional to any current tariffs we already have in place in China, creating a stacking effect.

Mat: And much like Canada, we saw China react with their own retaliatory tariffs. However, they aren't across the board tariffs to all commodities like the US imposed, right?

Ryan: Correct. China's tariffs went into effect on February 10th, were to the tune of 15% for coal and liquefied natural gas, and then 10% for US crude oil, agriculture machinery, large displacement vehicles, and pickup trucks going from the US to China.

Mat: And to complicate matters further, that hasn't been the only impact trade law that we've seen either. Uh, one thing that has gone a little bit under the radar is related to the de minimis exemption. And Ryan, briefly, you know, what is de minimis and what's going on with that?Ryan:  Yeah, Mat, you and I, we've brought up de minimis a few times on this video over the last 6 to 9 months. De minimis actually is a Latin phrase that means too small to be taken into consideration.

So, from a trade perspective, it's been in place to exempt small value shipments from being charged a duty when imported to the US. Specifically, it allowed goods under $800 in value to travel into the US tariff-free. But as of February 4th, the de minimis exemptions were removed for goods originating in China, and it's also slated to potentially go into effect for goods originating in Mexico or Canada on March 4th.

Now, I need to say it's important to note, this was paused after implementation. An amendment to the order says they plan to resume this once, and I quote, adequate systems are in place to fully and expediently process and collect tariff revenue applicable, which basically means they didn't have the processes in place to manage this.

Mat: Yeah, and I feel like this is the point where if we're on an infomercial, it would seem like it's over, but then there's something else that comes at you.

Ryan: But wait, there's more. Yeah. In fact, there really is one more thing I want to touch on, and that's the steel and aluminum tariffs that we have bolted on the right side of the screen. While the aluminum rate was previously at 10%, it will be increased to 25%. And for steel, there were several countries that had previously been exempt from the tariffs. As of March 12th, the plan is that they will also be subject to 25% tariffs. There are definitely some nuances here and it's a very dynamic situation, but at a high level, this is what you need to know.

Mat: Yeah, yeah, definitely dynamic and pretty complex as well. So, let's avoid going too far down the rabbit hole with that, but I will say one thing though, Ryan, you and our director of customs and compliance just hosted a webinar on the topic of tariffs and beyond just providing the new layout. The land, you guys both did a great job of talking about what options shippers have and, and how to navigate through these tariffs and to keep their business moving forward seamlessly. And, you know, why that webinar has concluded, it was recorded and is now available on demand on our website for everyone to watch.

Ryan: Yeah, and if you want a taste of what we covered, this one was my personal favorite slide because it, it shows some practical actions shippers can consider. I, I do encourage everyone to watch the webinar, reach out to their CH Robinson account teams to discuss their takeaways from that for any ways that we can help. Now changing subjects, it hasn't been the only large change announced that shippers need to be aware of. The other big topic is the LTL class changes that were announced by NMFTA.

Mat: And this is gonna be a pretty big deal for shippers too, especially given the commodity that they ship as well.

Ryan: Yeah, I think it's only fair, Mat, that since you made me go through the tariff stuff, you get this one this time.

Mat: Yeah, I think that's fair. I saw that one coming. All right. So, what's happening here is that the NMFTA is changing how NMFCs are related to the class. And, and this is a big deal because if you ship LTL freight and you don't take notice, you could be subject to reclassification under these new rules.

So ultimately what this is, the aim is to eliminate that ambiguity between NMFC and class. Now to do this, they are transitioning to a 13-tier density system, so the density of the freight will now determine what class it is. Now there are some freight that has some issues with stability or liability or handling. Uh, but for that freight, there's going to be a unique fixed classification signed.

Ryan: Yeah, and with this new classification system, it should bring some more improved predictability for shippers now being able to know for sure what their class is, which should lead to more accurate cost planning. So, Mat, it kind of leads me to like, what's next? Is this ready to go live?

Mat: Uh, not quite yet. Uh, you know, while the NMFTA has published their docket, uh, they have welcomed shipper feedback and proposed amendments which if you review it, you can file those amendments directly with the NMFTA between now all the way through March 3rd. Then they will release a final docket with all the final changes that will go into effect on July 19th.

Ryan: Perfect. Well, any last final thoughts on this topic?

Mat: Uh, I mean, I would say my advice to shippers would just be to ensure that when you are up to speed on how these new NMFC changes will impact your business. And if you don't know, just get with an expert here at CH Robinson, and we can walk through it together.

I know that there's a lot going on in supply chains right now as we previously discussed, and it may seem like you have plenty of time to kick the can on this, but I, I would say try thinking about doing that sooner than later because if you need to make changes to your process or complete an impact analysis or potentially looking to getting a freight dimensioner, acting sooner is gonna help you, plan better instead of when you get pressed up against time towards the end of this.

Ryan: Yeah, exactly, great point. Well, thanks, Mat: Thanks everyone for joining us. Remember, Robinson goes further than anyone else in providing you with global perspectives for how to manage your complex transportation strategies. For more details and additional insights, reference our website and the Robinson report.