Navigating the Tariff Storm Part XI: Light at the End of the Trade Tunnel?
July 25, 2025 By: David K. Teeple | Topics: Supply Chain, TariffsBy Daniel Hyla & David Teeple
Trade deals with Japan, Indonesia, and the Philippines were finalized this week, marking a continued step forward in the U.S.’s efforts to establish favorable trade terms ahead of the next looming trade deadline on August 1. These agreements further narrow the list of countries that have yet to respond to the firm reciprocal tariffs introduced by the Trump administration. While the list of holdouts has continued to condense, the major trade partners remain unresolved. Canada, Mexico, China, and the European Union, together accounting for the majority of U.S. trade volume, have yet to come to terms and now face the risk of facing reciprocal tariffs as early as next week.
Trade agreements with Japan, Indonesia, and the Philippines were largely motivated by the need to avoid steep penalties. Japan negotiated a 15% tariff ceiling, down from the 25% initially proposed in April, in exchange for launching a $550 billion U.S. infrastructure investment fund1. While the Trump administration has applauded the deal, U.S. automakers have expressed concern over potential competitive disadvantages. Japanese based automakers including Honda, Toyota, Nissan, Mazda Motor, and Mitsubishi all saw significant upticks in their relative stock prices subsequent to the deal. Following Japan’s lead, Indonesia and the Philippines reached agreements to cap tariffs at 19%, securing critical exemptions for their export-driven economies.2,3
Despite this progress in Asia, the U.S.’s largest trading partners continue to hold out, in hopes of seeking more favorable terms. China is currently under a temporary 90-day tariff truce set to expire on August 12. Mexico and Canada continue to resist the proposed tariff framework and could soon be subject to 30–35% tariffs, which would significantly impact their automotive, agricultural, and manufacturing sectors. The European Union is reportedly negotiating a deal similar to Japan’s 15% framework, but no agreement has been finalized. A recent WSJ article4 noted that the White House may issue additional “warning letters” in the days leading up to the deadline to “focus on forging quality deals.”
The finalized deals announced in recent weeks are a clear sign that progress is possible. However, the lack of resolution with the U.S.’s largest trading partners—China, Canada, Mexico, and the EU—continues to drive uncertainty about the future of global trade. With the August 1 deadline rapidly approaching, all eyes will continue to be on the Trump administration and its ability to bring these critical negotiations to a close.
Also announced this week were significant changes from the National Motor Freight Classification (NMFC) system regarding how Less-Than-Truckload (LTL) freight is classified.5 The former 11-tier density scale has been replaced with a more precise 13-tier system, reclassifying over 2,000 freight items. This new structure places greater emphasis on shipment density, meaning compact and heavier items may benefit from lower freight classes and cost savings, while lighter or bulkier items could become more expensive to ship. In addition, special handling, stowability, and liability considerations are now flagged separately to improve billing accuracy. The legacy NMFC lookup tool has been retired and replaced with ClassIT+ the new official platform. Shippers are strongly encouraged to review their current freight classifications, update shipment data, and evaluate packaging to avoid unexpected charges under the updated system.
As trade uncertainty and regulatory shifts continue to disrupt global trade, supply chain leaders must remain focused on building long-term resiliency across their operations. This includes taking proactive steps to reduce exposure to volatility by leveraging key enablers such as warehouse automation, labor management systems, and revisiting network strategy. Automation can help offset labor shortages and improve throughput, while modern labor management systems enable better visibility and control over workforce performance. At the same time, a dynamic network strategy allows organizations to adapt quickly to changing trade policies, transportation constraints, and customer demands. Rather than taking a wait-and-see approach, forward-thinking leaders are prioritizing flexibility, efficiency, and responsiveness to build a more bulletproof, agile, and competitive supply chain.
While it is important to stay up to date on geopolitical decisions and tariff outcomes, it is critical to maintain focus on running your operations. Now is the time to take stock of internal processes, identify inefficiencies, and invest in areas that drive long-term stability. By focusing on what’s within their control, leaders can better weather external disruptions and position their organizations for sustained success regardless of what happens on the global stage.
Let Sedlak assist you in addressing these challenging times. With over 65 years of experience advising industry leading organizations, Sedlak will help address the challenges of today and prepare you for an ever-evolving future. Reach out to David Teeple at dteeple@jasedlak.com or Daniel Hyla at dhyla@jasedlak.com for more information.
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