Above the Fold: Supply Chain Logistics News (February 14, 2025)

By Adrian Gonzalez

For our very first Valentine’s Day, I surprised my wife (who was my girlfriend at the time) with a hot air balloon ride over Sedona, Arizona at sunrise.

Today, we’re getting ice cream together before I go to a doctor’s appointment.

You can say I set the bar too high that first Valentine’s Day, and maybe that’s true. When you’re young and in love, you’re floating all the time, head and heart in the clouds.

But after almost 28 years of marriage, love is much more grounded, like the roots of a tree that keep it from falling, as it grows taller and taller, season after season.

Look at that couple, eating ice cream on such a cold winter day!

Yes, look at us, love,
look at us now!

—-

Moving on, here’s the supply chain and logistics news that caught my attention this week:

An ‘Eye for an Eye’ Trade Policy

Gosh, I’m getting tired of all this news about tariffs, but not as tired and frustrated as the global business community and global trade managers who are trying to keep up with all the back and forth changes.

The latest change came yesterday when the Trump Administration announced that “President Donald J. Trump signed a Presidential Memorandum ordering the development of a comprehensive plan for restoring fairness in U.S. trade relationships and countering non-reciprocal trading arrangements.”

In other words, it’s an “eye for an eye” tariff policy. If Brazil, for example, continues to charge U.S. ethanol exports a tariff of 18%, then the U.S. will increase its tariff on Brazilian ethanol from the current 2.5% to 18% too.

Sounds fair, right?

“Behind the superficial appeal of reciprocal tariffs are two major fallacies,” writes Douglas A. Irwin, an economics professor at Dartmouth College, in a commentary in today’s Wall Street Journal. “The first is that other countries are taking advantage of us in trade, and we know this because we have a trade deficit. But macroeconomic factors, such as the balance between domestic savings and investment and the flow of capital between countries, determine the trade balance—not tariffs.”

Irwin also highlights what this will mean for global trade managers:

A reciprocal policy would enormously complicate the U.S. tariff system. The Harmonized Tariff Schedule of the U.S., which details individual rates on particular commodities, has about 13,000 line items. The U.S. trades with roughly 200 countries. Is Washington ready to impose and manage 2.6 million individual tariff rates? The lobbying pressures for exemptions and exceptions on the U.S. side would be enormous. This would fill the swamp, not drain it. Foreign exporters would go to great lengths either to get their products under a lower tariff classification or to transship them to another country to reduce the duty they would face.

The crazy thing is that by the time I publish this post, this could all change again, creating ongoing risk, uncertainty, and frustration for everyone involved in global trade management.

It’s also sucking the oxygen out of everything else happening in the supply chain and logistics realm, as the long list of news items above shows. When I catch my breath, I’ll share my thoughts on the rest of the news next week.

Have a meaningful weekend!

Song of the Week: “Strangelove” by Depeche Mode