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Costco is among retailers and vendors already accelerating inventory arrivals as a short-term solution to minimize exposure to President-elect Donald Trump’s promised tariffs.
“We have a plan over time where we have done this in the past and typically, we'll look where we can to pull forward inventory buying, which actually we've done already because of some of the less predictability around shipping and how much time product spends on the water,” said Gary Millerchip, Costco’s EVP and CFO, on the retailer’s first-quarter 2025 analyst call on Dec. 12.
The pull-forward orders were also in part due to the risk of port strikes in India, Canada, and the U.S. East Coast.
The National Retail Federation (NRF) recently predicted that the U.S.’s major container ports should see a “continued surge in imports through next spring” due to the prospects of tariffs combined with another possible strike in January at East Coast ports.
“Retailers are doing what they can to avoid the impact of either for as long as they can,” Jonathan Gold, NRF’s VP for supply chain and customs policy, said. “We hope that both can be avoided, but bringing in cargo early is a prudent step to mitigate the impact on our industry, consumers and the nation’s economy.”
Many see a replay of 2018, when moves to impose tariffs on China during Trump’s first administration caused the frontloading of freight that drove a short-lived rise in ocean container shipping freight rates by more than 70%, according to ocean and air freight intelligence platform Xeneta. Trucking and warehouse rates also spiked.
However, Peter Sand, chief shipping analyst at Xeneta, told CNBC that the incentive to frontload should be “even greater” with Trump on the campaign trail pledging a tariff of 60% to 100% on goods imported from China, up from the 25% rate China initially faced in 2018.
Trump has also threatened across-the-board tariffs of 10% to 20% on all imports arriving in the U.S. to support U.S. business interests, 25% tariffs on imports from Canada and Mexico to reduce the flow of illegal migrants and fentanyl coming into the U.S., and tariffs on the BRICS group — comprising nine emerging market countries including Brazil, Russia, India, and China — to protect the U.S. dollar.
“It is an open question what level of tariffs will be imposed,” Lars Jensen, CEO of Vespucci Maritime and a freight consultant, told CNBC. “Trump has mentioned anything between 100-500% and it is therefore completely unknown what will actually transpire. But, again, that means significant uncertainty for U.S. importers, and the only way to reduce the uncertainty will be to import goods earlier.”
Shipper C.H. Robinson predicted the new tariffs could be in effect by late February or early March.
A Wall Street Journal article noted that many U.S. firms are aggressively stockpiling auto parts, electrical components, and fabricated metal products as China remains a key exporter of parts and raw materials for certain industries. In November, buying activity among North American manufacturers, measured in a survey of 27,000 businesses worldwide by GEP and S&P Market Intelligence, hit its highest level in more than a year, according to the report.
Sebastien Breteau, founder and CEO of consumer product quality control company QIMA, is less convinced that tariffs will hit other nations, believing they’re more likely to be used as a negotiating tool. He told Supply Chain Brain, “Trump has been known to change his mind.”