For the latest chapter in the saga involving tariffs under the Trump administration, the US recently announced sweeping trade barriers on next door neighbours Canada and Mexico as well as China and India only to backtrack days later. This decision has sent shockwaves through markets and logistics networks alike.

So let’s take a closer look at why and at what cost?

Tariffs on or off: strategy or chaos?

Chaos ensued when President Trump declared a 25 percent tariff on all imports from Canada and Mexico, citing national security and border concerns. Markets immediately reacted sharply, and US trade partners quickly threatened countermeasures.

Within days, the administration backpedalled, and claimed diplomatic “progress” had been made. China, one of Trump’s main tariff targets, was drawn back into the trade war narrative as reports surfaced about potential new tariffs, only for officials to soften their stance, and hint at continuing trade negotiations. India also found itself in Washington’s crosshairs as they reinstated tariffs on key Indian exports, despite earlier indications of a friendlier trade relationship. This unpredictable approach has left affected businesses scrambling, trying to figure out whether to reroute shipments, hold off on imports, or rush orders before tariffs can take effect.

So what’s driving this instability?

Here are a few possibilities:

Leverage: The tariff threats may have been a bargaining tactic to pressure Canada, Mexico, and India into trade concessions or stricter enforcement of trade agreements. An economic reality check: The tariffs risked serious harm to U.S. industries that rely on global supply chains such as automakers, tech firms, and retailers. This has forced a rapid reversal. Political theatre: Of course with elections looming, Trump’s toughon-trade stance appeals to his base. However, the economic damage of the tariffs has forced retreats thus far.

Wall Street’s wild ride

Markets thrive on predictability, and this tariff rollercoaster is injecting volatility into the financial system. With the Nasdaq plummeting over percent, and the S&P 500 dropping 2 percent in a single day, investors either sold prior or struggled to make sense of it all. Trump’s reluctance to rule out a recession only added fuel to the fire, sending stocks into a downward spiral. Even safe-haven assets like gold saw dramatic fluctuations.

So what does this all mean for air cargo?

Tariff uncertainty has real, immediate consequences. Each new tariff threat sends businesses scrambling to reroute shipments, throwing established freight lanes into chaos. These sudden reversals make long-term logistics planning a nightmare. In times like these companies also try to rush goods ahead of the potential tariffs, which temporarily boosts demand for air cargo, only to see it plunge when the policies shift again.

Global fallout In response to the United States’ unpredictable trade policies, traditional trading partners are actively seeking to safeguard their economies by diversifying trade relationships and reducing reliance on US markets. Canada and Mexico have expressed deep frustration over Washington’s unpredictability. In Canada, the recent appointment of Mark Carney as the new leader has led to more trade tensions with the US and as of now he intends to maintain retaliatory tariffs on US goods until the US recommits to free trade.

China has downplayed the latest tariff threats from the US, but exporters are proactively adjusting by shifting supply chains toward Europe and Southeast Asia to mitigate risks associated with US tariffs. India was recently blindsided by the U.S. decision to revoke trade privileges and has signalled intentions to seek stronger trade ties with alternative partners, including the European Union (EU) and the Association of Southeast Asian Nations (ASEAN). Europe has also warned that the US’s erratic trade policy is undermining global business confidence, forcing European firms to seek alternative sourcing and production strategies.

The EU’s concerns stem from the need to maintain stable trade relationships and protect their economies from the ripple effects of US trade unpredictability.

How can the industry navigate this uncertainty?

Though we can’t confirm Trump’s back and forth when it comes to tariffs is a deliberate negotiation tactic, their consequence is very real. Businesses, investors, and logistics operators are being left scrambling to adjust to shifting policies, making long-term planning all but impossible. In the air cargo industry, where predictability is king, this level of uncertainty will prove to be unsustainable.