Tariff policy changes and updates continue
U.S. tariff policy is now focused on implementation, compliance and product-level cost impact.
- The Section 301 action, which took effect July 24, added new duties of 10% to 12.5% on covered goods from 60 countries, effectively replacing the temporary 10% global tariff that expired the same day.
- Section 232 tariffs on copper, steel and aluminum imports remain active, and the Department of Commerce is proposing the addition of 14 derivative product categories under its coverage, including some types of cables.
- Customs and Border Protection continues to carefully examine origin, classification, valuation and documentation.
Incoming tariffs include an additional 50% on certain Canadian goods scheduled for Wednesday, August 19, while trade talks between the United States and Canada continue.
The big picture: Many supplier price increases are being tied to inflation, labor, freight and raw materials rather than tariffs alone, even though tariff-related costs continue to influence those inputs.
For additional information on tariffs, including a list of active, upcoming and counter tariffs, please read the Fact Sheet on our website.
July employment figures suggest employers are becoming cautious
The U.S. labor market weakened further in July, as hiring slowed and prior months were revised lower.
Zoom in: Construction continued to add jobs in July, while healthcare and manufacturing sectors also remained a source of hiring strength.
By the numbers:
- Nonfarm payrolls decreased by 23,000, compared to a revised gain of 20,000 in June. The May and June combined figures were revised lower by 103,000 jobs.
- Unemployment fell 4.1% in July, compared to 4.2% the previous month.
- The labor force participation rate fell to 61.4%, down from 61.5% last month.
- The Consumer Price Index rose 1% month over month, putting the annual inflation rate at 3.4%.
- The Producer Price Index increased 7% year over year in July, following a 5.5% gain in June.
Why it matters: The labor market is showing clearer signs of slowing, suggesting employers are becoming more cautious about hiring. This could gradually improve workforce availability for some positions and help moderate future labor cost increases.
Yes, but the biggest operational risk remains skilled trades, utility crews, field service resources, transportation-related labor and other execution-critical roles that directly affect project schedules.
Ocean freight rally peaked in July
The ocean freight market experienced a peak in July, driven by tariff-related frontloading, tight equipment and port congestion, before easing as frontloading faded ahead of the new Section 301 U.S. tariff activation.
By the numbers: Drewry Container Index rose 2.1% from late June to late July, peaking at $4,639 per 40-foot equivalent unit (FEU) mid-month. HMM’s Transpacific Peak Season Surcharge of $3,000 per FEU took effect July 15. Nine blank sailings were announced on the Transpacific trade lane in late July, signaling continued capacity management as demand cooled.
U.S.-bound ocean freight: Shanghai to New York (U.S. East Coast) spot rates increased by 6%. Shanghai to Los Angeles (U.S. West Coast) rates remained flat. Despite softening demand after the tariff deadline, carriers continued to manage capacity and defend pricing through blank sailings, general rate increases and mid-July freight-of-all-kinds hikes.
However, resumed hostilities between the United States and Iran reintroduced uncertainty and prompted carriers to file Emergency Fuel Surcharges, which took effect this month, keeping the marketed elevated and unsettled as it enters Q3.
August brings targeted cost pressure for raw materials
Metals remain the primary cost risk, but the pressure is not the same across every category.
The big picture: Copper continues to be the closely watched commodity, supported by strong demand from electrification, utility infrastructure, grid modernization and data center construction. Aluminum remains expensive for U.S. buyers due to tariffs, import dependence and the Midwest premium continuing to influence delivered costs. Steel prices remain firm and continue to be supported by strong domestic demand and a favorable environment for steel mills. PVC conduit manufacturers announced August price increases tied to resin, additives, transportation and energy costs.
Across the categories:
- Copper futures on the COMEX traded near $6.60 per pound in early August, up approximately 6% over the past three months and 44% over the past year, while prices on the London Metal Exchange (LME) are near $13,834 per metric ton, up 45% year over year.
- Aluminum on the COMEX traded near $2.54 per pound in early August, while LME aluminum is near $3,196 per metric ton, up roughly 26% year over year.
- Hot-rolled steel is up approximately 10% over the past three months and 36% over the past year. Cold-rolled steel is up approximately 15% and 33% while steel plate pricing is also up 30% year over year, respectively.
- PVC resin is hovering near $0.84 per pound, slightly down from this year but still approximately up 8% year over year.
- Lumber traded near $614 per thousand board feet, in early August, down approximately 12% from a year prior; however this is roughly 23% above level from two years ago. While Canadian softwood lumber is exempt from the incoming 50% U.S. tariff on certain Canadian goods, it remains subject to existing 35% tariff.
- Crude oil remains volatile, nearing $82.92 per barrel, up approximately 21% year over year. While prices remain below spring highs, they are still elevated enough to influence diesel, freight and petrochemical feedstock costs.
U.S. surface market stabilizes after three-month rise
July saw the surface market stabilize after an extraordinary run-up in the past three months, with spot rates for dry vans and flatbeds slightly decreasing but remaining well above prior year levels, all while capacity stayed historically tight.
Zoom in: The DAT monthly average spot rates settled at $3 per mile for dry van and $3.64 per mile for flatbed, each down modestly month over month, but still running sharply above prior-year levels. Load-to-truck ratios reflected the same cooling pattern — the van ratio eased 1.3% month over month, while flatbed pulled back 28.4% month over month, yet both remain dramatically elevated year over year.
The big picture: Truckload capacity remains structurally tight, reinforced by non-domiciled CDL and English Language Proficiency enforcement continuing to pull drivers out of service. This prompted carriers to raise wages at the fastest two-month pace on record, pointing to a higher rate floor holding through year-end.
Why it matters: Shippers absorbed a higher cost floor as carriers retained pricing leverage, emphasizing the importance of strong carrier partnerships and proactive planning.
Longer term, the rate environment will be shaped by carriers continuing to recover the margin they surrendered during the multi-year downturn, with the fall bid season shaping up as the pivotal window for locking in contract pricing before 2027.