Tariffs and Their Impact on Domestic Transportation

February 17, 2025

Tariffs impact domestic transportation, driving demand shifts, higher costs, and new opportunities in the U.S. trucking industry.

Impact on Steel and Aluminum Imports

Approximately 20% of U.S. steel and 25% of aluminum are imported from Canada. A reduction in supply from Canada may force American companies to explore alternative sources for these materials. As supply chains adjust, an increased demand for domestic transportation services may arise. Domestic transportation networks may need to adapt to accommodate these shifts in sourcing strategies.

Effects on the Trucking Industry

Many American trucking companies do not operate across the U.S.-Canada border. Likewise, most Canadian companies are not permitted to transport goods domestically within the United States. As a result, new opportunities may emerge for American trucking companies to handle shipments previously moved through cross-border operations. Domestic transportation providers may experience increased demand as a result of these changes.

Challenges from Tariffs

While opportunities exist, significant challenges are also presented by these tariffs. The higher costs of steel and aluminum could lead to increased prices for goods. In turn, this may reduce demand and impact freight volumes. Furthermore, uncertainty regarding implementation and potential retaliatory measures from other countries adds further complexity to the logistics and domestic transportation industries.

Potential Boost for the Transportation Market

Despite these challenges, positive developments may occur for the struggling U.S. transportation market. A surge in demand could drive increases in freight rates across the board. If sustained, this shift may provide a much-needed boost to an industry facing prolonged difficulties. Domestic transportation companies could benefit from a rise in freight movement, further stabilizing the market.