MARKET BRIEF | May 2025
The Latest on the Trump Tariffs
Last weekend, the U.S. and China reached a new tariff agreement. The U.S. reduced tariffs on Chinese imports from 145% to 30%, while China lowered tariffs on American goods from 125% to 10%. This mutual reduction was part of efforts to adjust trade terms between the two countries. Separately, the U.S. imposed a 100% tariff on foreign-made films. This decision led to responses from international film industry figures, including criticism at the Cannes Film Festival.
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U.S. Ports Anticipating Congestion
U.S. ports are preparing for potential congestion following the recent U.S.-China tariff agreement, which temporarily reduced tariffs on Chinese goods from 145% to 30% for 90 days. This has led to a surge in shipping demand as importers expedite orders to capitalize on the reduced rates before the agreement expires. However, this sudden increase could overwhelm port capacities, leading to delays and higher shipping costs. Additionally, proposed U.S. fees on Chinese-built ships – potentially up to $1.5 million per port call – may cause carriers to reduce port visits, concentrating traffic at major ports and exacerbating congestion.
UPS Makes Cuts Across Four States
UPS is set to close five facilities in Massachusetts, Pennsylvania, and Wisconsin, and eliminate a sortation shift in Ohio. This will be done as part of a broader plan to shut down 73 locations and cut 20,000 jobs by June. These closures are part of the company’s “Network Reconfiguration” initiative, which aims to align its U.S. network capacity with anticipated volume declines, particularly due to reduced business with Amazon. The affected employees, many of whom are part-time and represented by the Teamsters union, have “bumping rights” (contractual privileges that allow senior employees to displace less senior employees in their positions during layoffs or reductions in force), and UPS is working to reassign as many as possible.
Canada Post Labor Deal Expiring
The collective agreements between Canada Post and the Canadian Union of Postal Workers (CUPW) are set to expire on May 22. Negotiations had been ongoing, with key issues including wages, job security, and working conditions. However, Canada Post recently paused talks to prepare new proposals aimed at advancing discussions. If no agreement is reached by the expiration date, workers could strike, potentially disrupting mail and parcel services nationwide. A previous strike in late 2024 caused significant delays and backlogs, impacting individuals and businesses across Canada.
