Amid shifting U.S. trade policy that has left global business leaders without the policy clarity they need to map long-term investments and supply chain strategies, top trade and logistics experts are warning that persistent uncertainty will reshape cross-border commerce for years to come. Douglas Irwin, a Dartmouth College economics professor, outlined the risks to business planning during a Wednesday media briefing hosted alongside Gene Seroka, Executive Director of the Port of Los Angeles, where the pair discussed evolving tariffs, shifting global trade dynamics, and ongoing U.S.-China trade relations.
When asked about the trajectory of ongoing U.S.-China dialogue and potential tariff adjustments, Irwin emphasized that policy predictability is non-negotiable for companies making medium- and long-term capital commitments. “Businesses absolutely need that predictability of the business environment to make medium-term and long-term investments,” he told reporters.
The current state of uncertainty traces back to 2025, when the second Trump administration imposed sweeping new tariffs on Chinese goods that sent U.S.-China trade tensions soaring. While both sides have since taken incremental steps to de-escalate friction and keep diplomatic channels open, doubts about the future of trade policy have yet to fade. Irwin characterized the current bilateral trade relationship as relatively stable but deeply fragile, describing it as “an uneasy truce” with no guarantee it will hold in the long term.
Companies have no clear visibility into whether Washington will keep existing tariff levels in place or ramp up pressure on Beijing after it concludes ongoing trade reviews, including the upcoming update to the United States-Mexico-Canada Agreement (USMCA). This ambiguity is already driving decisions to shift sourcing away from China, Irwin explained, with many businesses relocating supply chains to Vietnam and other Southeast Asian economies, or expanding nearshoring to Mexico to reduce exposure to policy risk. With no end to uncertainty in sight, companies have little option but to diversify their supply base and build hedges against future policy shifts, he added.
Irwin noted that former and current President Trump has remained the central architect of U.S. trade policy across both of his administrations, consistently framing tariffs as a key tool to advance broader economic and political priorities. “For the next two years, at least, we still have to keep our eye on what the president believes about trade and how he might act,” Irwin said.
New proposed trade measures are adding another layer of uncertainty for global importers. The Office of the U.S. Trade Representative has floated new Section 301 tariffs tied to other nations’ enforcement of forced labor goods bans, with proposed rates ranging from 10% to 12.5%. As of the briefing, the measures were still under formal review. Irwin also advised importers to closely watch what policy will replace temporary Section 122 tariffs when they expire, explaining that the Trump administration is seeking to replace parts of the temporary tariff regime with new Section 301 measures. This framework would preserve most of the current tariff structure while leaving companies guessing about which countries and product categories will ultimately face new duties. “This is sort of the environment we’re going to be in for the next two years: uncertainty about USMCA, uncertainty about the China relationship, and then uncertainty with these Section 301 tariffs,” Irwin added.
Shifts to rules for low-value shipments have created new burdens for small and medium-sized importers as well. The U.S. has recently suspended duty-free de minimis treatment for most packages valued at $800 or less, while implementing new complex customs processing requirements. Irwin explained that the changes will ramp up compliance and administrative costs for small importers that have long relied on simplified customs procedures for small, low-value mail-order shipments.
Seroka echoed that observation, noting that the impacts stretch beyond individual online consumers to small, family-owned businesses that depend on small-batch imports. He recalled meeting with independent retailers along Los Angeles’ Melrose Avenue and in West Hollywood that built their business models around regular small shipments, only to face sudden, unaffordable tax hikes that threaten their operations. “Then suddenly they were hit with tax hikes that were almost insurmountable based on the size of their business,” Seroka said. “It’s going to be a big deal for us coming up.”
Looking ahead to future U.S. administrations, Irwin predicts that any future White House, whether led by a Republican or Democratic president, will prioritize greater trade policy stability but is unlikely to reverse the shifts of recent years and return to the pre-2025 tariff framework. “I think there will be a settling down after the Trump administration,” he said. “Any new administration, whether it’s Republican or Democrat, will still be concerned about trade policy in a big way, but want more stability.” Even so, Irwin noted that once tariffs are implemented, companies adjust their supply chains and domestic industries build political support for retaining the protection tariffs provide, meaning policy changes that happen quickly are rarely reversed quickly. “That doesn’t mean we go back to where we were in, say, 2015 with respect to trade policy,” he said. “What tends to go up quickly sometimes comes down slowly.”
U.S. trade policy is not the only source of market disruption for cargo moving through the Port of Los Angeles. Seroka added that ongoing conflict in Iran and related disruptions to shipping through the Strait of Hormuz have driven up fuel costs for all modes of cargo transportation, from ocean vessels to overland trains and trucks. The immediate impact has already shown up in higher prices for bunker fuel for ships, as well as elevated diesel and gasoline costs for transportation providers and end consumers.
While there were widespread concerns that disruptions to Middle East-bound cargo would create bottlenecks at major Asian ports, Seroka said recent visits to ports in Shanghai, Singapore and Yokohama confirmed that terminal operators have successfully rerouted and separated affected cargo flows. “Our cargo is flying through the market as best it can without impacts from what’s going on with the war in Iran,” he said. The next expected impact will be new or increased fuel surcharges that shipping lines will pass along to importing and exporting companies, he added. “You’ll see a bump there,” Seroka said. “When prices go down, usually that surcharge remains elevated and it lags for some time before it gets back to a price point that’s a little more reflective of what we see today.” Even if the conflict were to end immediately, damaged energy infrastructure and disrupted global energy supply networks will take months to repair, Seroka noted. Despite these headwinds, he emphasized that trans-Pacific trade volumes remain strong and continue to move efficiently through the port.
