In this episode of Logistically Speaking, hosts Scott Case and Cameron Roberts sit down a day after President Trump's second inauguration to discuss the flurry of Executive Orders and trade rhetoric with Carlos Sesma, Senior Partner at Mexican law firm Sesma, Sesma & McNeese. The conversation explores the complex interplay between politics, trade, and regional economic integration.

• President Trump's announcement of potential 25% tariffs on Mexico and Canada
• Changes to Mexico's IMMEX program affecting chapters 61, 62, and 63, introducing a 35% duty rate
• Impact on e-commerce companies using Mexico as a distribution hub
• Relationship between trade policies and immigration concerns

• Mexico's critical dependence on US trade (86% of exports)
• Analysis of Mexico's strategic position between US and China
• Discussion of USMCA renegotiation possibilities
• Impact of potential tariffs on regional manufacturing and supply chains

• Major Mexican infrastructure projects:
  • The Mayan Train project connecting the Yucatan Peninsula
  • Trans-isthmic railway development as Panama Canal alternative
  • New Tulum Airport with cargo capabilities
  • Focus on developing Mexico's southern regions

• Evolution of North American trade relationships
• Role of rail infrastructure in regional connectivity
• CPKC (Canadian Pacific Kansas City) railway expansion plans
• Impact of new administrations in all three countries

• Preparation for potential USMCA negotiations
• Changes in Mexican governance and judicial system
• Importance of maintaining business relationships despite political rhetoric
• Regional economic development strategies

• America First Trade Policy
• Mexico Issues 35% Tariff on Textiles

In this episode of Logistically Speaking, co-hosts Scott Case and Cameron Roberts sit down with Paul Bingham, Director of Global Intelligence and Analytics, Transportation Consulting for S&P Global Market Intelligence, to dissect the potential impact of sweeping new tariff proposals following the November 2024 U.S. presidential election. The discussion centers on how proposed tariffs - ranging from a global 10% import duty to targeted levies of up to 200% on specific trading partners - could reshape international commerce and supply chains. Bingham reveals how S&P Global has recalibrated their economic models to account for these dramatic policy shifts, offering insights into what businesses might expect in 2025 and beyond.

The conversation explores the ripple effects these tariff changes could have throughout the global economy, from consumer prices to fuel costs, and examines how different sectors might adapt to this new trade landscape. Cameron details the means by which the administration can promulgate some of these proposals on day one based on the power vested in the Executive Branch by Congress.

Bingham shares detailed analysis on how these policies could impact critical trade relationships, particularly with Mexico and Canada under USMCA, while also addressing concurrent challenges in global shipping, including Red Sea disruptions, evolving air cargo capacity, and the ongoing transformation of international supply chains. The discussion further examines the intersection of tariff policy with other key economic factors, including the CHIPS Act implementation, de minimis trade rules, and the potential responses from BRICS nations.

About Paul Bingham:
Paul Bingham serves as the Director of Global Intelligence and Analytics, Transportation Consulting for S&P Global Market Intelligence. With decades of experience in economic and transportation analysis, Bingham is a recognized expert in global trade patterns and supply chain economics. He regularly provides strategic guidance to both public and private sector clients on transportation and trade policy issues. His work at S&P Global includes leading teams that develop economic forecasts and analyze global trade trends, helping organizations navigate complex international market dynamics and policy changes. Bingham is a frequent speaker at industry conferences and events, including the recent WESCCON gathering of customs brokers and freight forwarders.

Relevant Links:

USMCA (United States-Mexico-Canada Agreement) https://ustr.gov/usmca

S&P Global Market Intelligence https://www.spglobal.com/marketintelligence/en/

International Emergency Economic Powers Act (IEEPA) https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information

CHIPS and Science Act https://www.commerce.gov/chips

Section 232 Trade Investigations https://www.bis.doc.gov/232

De Minimis Trade Rules & Section 321 https://www.cbp.gov/trade/basic-import-export/e-commerce/section-321-value-increases

Federal Maritime Commission (FMC) https://www.fmc.gov/

TIACA (The International Air Cargo Association) https://www.tiaca.org/

Suez Canal Alternative Routes https://www.suezcanal.gov.eg/

BRICS Economic Coalition https://infobrics.org/

De minimis, originating from Section 321 of the Tariff Act of 1930, has evolved from its humble $5 threshold (equivalent to $85-90 today) to become a cornerstone of modern e-commerce imports. While the 2015 Trade Facilitation and Trade Enforcement Act's increase to $800 grabbed headlines, U.S. Customs and Border Protection (CBP) notes that the average de minimis shipment value remains around $55-60. The real story isn't the threshold increase, but rather how the pandemic accelerated e-commerce adoption, leading to an unprecedented surge in these shipments—from hundreds of thousands just a handful of years ago to 1.4 billion in fiscal year 2023.

The implications of de minimis extend far beyond simple duty exemptions. This provision has reshaped supply chains, particularly for high-duty products like apparel and footwear, by enabling companies to fulfill orders directly from overseas warehouses or through facilities in Mexico and Canada. While this has benefited consumers through lower prices and faster delivery times, it's created significant challenges for CBP's enforcement capabilities, particularly in screening for counterfeits and illegal substances like fentanyl.

In this episode, we explore:

• The various methods of processing de minimis shipments, including Type 86 entries, manifest clearances, and the unique advantages of different transportation modes
• How the Consumer Product Safety Commission's upcoming e-filing requirements in 2025 could reshape the landscape for apparel and children's products
• The political battle between government agencies seeking stricter controls and private sector entities defending current practices
• Potential regulatory changes, including CBP's proposed $2 per package fee and the possible exclusion of "import-sensitive" products
• The evolving role of customs brokers in this changing landscape, transitioning from data entry to strategic advisors
• The impact of artificial intelligence and technology on customs processing and compliance

Guest: Tom Gould, Principal of his own consultancy, licensed customs broker, Certified Customs Specialist, and current member of the public-private COAC committee, appointed by Treasury Secretary Yellen and DHS Secretary Mayorkas in 2022.

Join us for an in-depth discussion on this crucial topic that's reshaping international trade and e-commerce.

Source Material:

US bipartisan FIGHTING for America Act aims to close de minimis loophole

White House De Minimis Fact Sheet

Blumenauer Legislation Announcement

WSJ: Trade ‘Loophole’ Used By China Should Be Closed, House Democrats Tell Biden (paywall)

CBP Trade Enforcement and Trade Facilitation Act of 2015