US Tariffs and Service Fees

On 2 April 2025 ("Liberation Day"), Trump announced a series of tariffs, namely tax on imported goods in an effort to reverse trade deficit, promote domestic manufacturing and job creation and force US trade partners to negotiate new or better trade deals. Whilst most tariffs have been suspended for 90 days, a 10% tariff on all US imports, a 25% tariff on cars, steel and aluminium imports and  a 145% tariff on Chinese imports are already in place. It is doubtful if these measures will bring about what the Trump administration is seeking - instead we have seen a trade war starting with China retaliating with counter tariffs,  the stock market crashing, the US Dollar becoming weaker, US tourism reducing, reduced GDP growth projections. In short, there is a rising expectation of recession, because businesses are avoiding trading with the US if they can, If this was not enough, on 17 April 2025, Trump proposed service fees on Chinese owned or built vessels calling at US ports - these measures are still subject to consultation- which is why their effects have been suspended for 180 days until 14 October 2025 but again they are intended to hit primarily containers and car imports. It is hoped that a definition of Chinese owner and operator will be clarified. Meanwhile, whilst US businesses are considering changing their supply chains in favour of domestic manufacturing, US trade counterparts would be best advised to review their existing contracts to see if they are adequately protected. For example, building in flexibility to claim economic duress, so as to renegotiate the price, or terminate the contract will be essential. Watch this space for more news.