Tariff whiplash starting to cause US supply-chain stress

Tariff threats and heightened trade policy uncertainty began causing stress in supply chains. A massive increase in imports because of front-loading ahead of tariffs caused port congestion to rise, kept air freight prices elevated, and increased manufacturing overtime hours worked.

What you will learn:

• Front-loading will keep upward pressure on air freight rates in the near term, but rates are still considerably lower than they were in 2021-2022. Although supply-chain stress is unlikely to cause inflationary pressure, we expect tariffs to lift core inflation to average above 3% in 2025.
• The front-loading of imports is not likely over, due to the on-again, off-again approach to tariffs from the Trump administration. We expect inventory stocking to contribute 0.25ppts-0.4ppts to GDP growth each quarter this year.

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