This week:
- Appeals court says Trump lacked authority for reciprocal tariffs, SCOTUS likely to decide case
- Sharp downturn in container shipping industry predicted amid overcapacity and lowered demand
- Following the end of the de minimis exemption, postal carriers worldwide halt shipments to the US
- Canada Post, CUPW labor talks at a stalemate again, carrier cites “significant gap” in negotiations
Appeals Court Strikes Down US Reciprocal Tariffs, Case Headed to SCOTUS
A federal appeals court on Friday ruled that US President Donald Trump overstepped his authority in levying a broad range of tariffs, declaring them illegal. The court paused enforcement of its decision until October 14, anticipating an appeal to the Supreme Court of the United States by the White House.
The ruling by the US Court of Appeals for the Federal Circuit specifically calls out Trump’s reciprocal tariff policy, which his administration imposed under the International Emergency Economic Powers Act (IEEPA). The decision does not affect other Trump tariffs, such as those on imported steel and aluminum, which were authorized under different laws.
In a 7-4 decision, the court’s majority stated that the IEEPA — a law passed amid the economic malaise of the mid-1970s — grants the president powers to respond to “unusual and extraordinary” threats, but “does not explicitly include the power to impose tariffs, duties, or the like.”
In late May, the US Court of International Trade first struck down Trump’sTrump’s IEEPA-based tariffs in a case filed by VOS Selections, a New York-based importer and distributor. That court also allowed the reciprocal tariffs to remain in place while the White House appealed, setting the stage for last Friday’s ruling. The White House has expressed confidence that the Supreme Court will overturn the decision.
Container Shipping Industry Braces for Downturn Amid Overcapacity, Lower Demand
The global container shipping industry appears to be heading into a volatile period, according to an industry analysis by Peter Tirschwell, vice president of the Journal of Commerce (JoC). Analysts warn that a massive oversupply of new vessels is likely to overwhelm the market, potentially driving down rates and leading to service disruptions.
Tirschwell points to a recent market update from J.P. Morgan, which states that the container shipping industry is “suffering from material oversupply” that could lead to a multi-year downturn. The bank predicts that even the long-running Red Sea crisis and port congestion won’t be enough to counter the anticipated 30% increase in global capacity over the next few years.
In its market update, J.P. Morgan projected that volume growth would slow dramatically for the remainder of the year and would grow at only 2% annually from 2026 onwards. This follows a 4.5% growth in shipping volumes in the first half of 2025, driven by frontloading before the pause on US reciprocal tariffs ended early last month. At the same time, the bank anticipates effective supply growth of 6.5% in 2025, creating a significant imbalance that will put severe pressure on rates.
Tirschwell says that for US shippers, this forecast is a mixed bag. While a drop in shipping rates would undoubtedly be welcome, it may come at the cost of scheduling reliability. Given that shippers will likely try to mitigate losses through procedures such as slow steaming (where ships travel at reduced speeds to conserve fuel), shippers may have to contend with longer and less predictable transit times.
Subscribe to JMR’s Weekly Supply Chain Roundup!
Stay informed with the latest supply chain news, trends, and insights. Get it delivered directly to your inbox every week.
Global Mail Shipments to US Halted After Elimination of De Minimis Exemption
Numerous postal organizations around the globe have suspended mail and parcel shipments to the US following the recent elimination of the de minimis exemption. The rule previously allowed goods valued under $800 to enter the country duty-free. Postal services in Asia and Europe say they cannot meet the tight deadline to comply with the complex new customs requirements that followed in the wake of de minimis.
The US de minimis exemption officially ended last Friday, August 29, meaning import duties are now required on nearly all imported goods. However, the US Customs and Border Protection (CBP) agency only released the technical details of the new regulations on August 15, leaving international postal agencies just two weeks to overhaul their systems.
Citing insufficient time and a lack of clear guidance, major postal operators — including Japan Post, Australia Post, Germany’s Deutsche Post DHL Group, and France’s La Poste — have temporarily stopped accepting US-bound shipments. They join dozens of other state-run postal services that have voiced similar concerns.
“The US de minimis elimination is causing global logistical disruptions, with postal suspensions reflecting unresolved operational challenges,” Dmitry Kulish, an air cargo logistics director with the ACN Group, told the JoC.
The postal services say the main problem is the lack of a defined process for assessing, collecting, and remitting new import duties to the CBP. Unlike commercial freight carriers, postal systems are not equipped to act as customs brokers for millions of small parcels.
While analysts expect small businesses and customers to experience significant delays while the issues are resolved, the overall impact is expected to be minimal. According to JoC reporting, mail accounts for less than 1% of total US inbound air cargo traffic.
Canada Post Says “Substantial Gap” in Union Talks as Parcel Business Declines
Canada Post says a “substantial gap” remains in its contract negotiations with the Canadian Union of Postal Workers (CUPW), according to a statement released last week. With little progress made on key issues, the prolonged labor uncertainty has led to a significant decline in the national postal carrier’s business, as shippers opt for competing services instead.
Canada Post and CUPW are back at the bargaining table after union members voted to reject the carrier’s previous contract proposals. In its statement, Canada Post says the union’s latest counteroffers have either maintained or hardened its initial positions, leading to yet another impasse in the long-running negotiations.
The primary points of contention remain wage increases and staffing for weekend deliveries. CUPW is demanding a 19% pay hike over four years, while Canada Post’s offer included a 13.59% increase. The carrier also wants to establish new part-time employee groups to handle weekend parcel volume, a position the union has firmly rejected since the beginning of contract talks.
An overtime ban imposed by the union since May 23 has compounded instability, prompting commercial clients to seek more reliable alternatives. In its second-quarter report, Canada Post announced that its parcel volume decreased by 36.5% year-over-year, accompanied by a 36.7% decline in parcel revenue. Businesses are increasingly turning to carriers like FedEx, UPS, and Purolator to ensure the labor turmoil does not delay their deliveries.
