Tariff War With Canada, China Warns Walmart, US Inflation Slows

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Welcome to CrossDock’s Weekly Dispatch,

We’re back with the key stories shaping supply chains, e-commerce, logistics, and retail. From tariff battles between the U.S. and Canada to Walmart facing pressure in China, here’s a quick overview of last week’s biggest developments.

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Big News 📣

US-Canada Trade War Begins

Trade tensions between the U.S. and Canada are back in the spotlight. Ontario, Canada’s most populous province, announced a 25% surcharge on electricity exports to Michigan, Minnesota, and New York. However, the plan was quickly shelved after President Trump threatened to impose an additional 25% tariff on aluminum and steel imports from Canada—doubling the existing duties.

Previously, in response to U.S. tariffs, Canada announced retaliatory measures totaling C$29.8 billion. These measures include tariffs on steel products worth C$12.6 billion, aluminum products worth C$3 billion, and an additional C$14.2 billion on other U.S. imports.

• Power pause ⚡️: Ontario Premier Doug Ford announced earlier Tuesday afternoon that he was pausing the surcharge after discussing it with U.S. Commerce Secretary Howard Lutnick.

   

• Diary time🥛: In a Truth Social post, President Trump demanded that Canada "immediately drop" what he called an "Anti-American Farmer Tariff" on certain U.S. dairy products

EU Imposes Retaliatory Tariffs on U.S. Goods

In a decisive response to U.S. President Donald Trump's recent 25% tariffs on steel and aluminum imports, the European Union (EU) has announced plans to implement countermeasures targeting approximately €26 billion ($28 billion) worth of U.S. goods.

Scheduled to commence on April 1, these tariffs will affect a diverse array of American products, including steel, aluminum, agricultural items, and consumer goods such as motorcycles and bourbon whiskey.

• Tarrific moves 🇪🇺: The EU will implement its response in two phases: Initially, imposing tariffs of up to 50% on U.S. goods, including Harley-Davidson motorcycles and Kentucky bourbon, effective April 1. This will be followed by additional measures in mid-April, targeting agricultural and industrial products crucial to Republican strongholds.

• Counterattack 🤜🏻: President Donald Trump has threatened to impose 200% tariffs on alcoholic beverages, including wine and champagne, from France and other European nations unless the European Union rolls back its retaliatory tariffs on U.S. goods.

China Slaps Tariffs on US Agricultural Products

In retaliation to U.S. tariffs, China has imposed 15% tariffs on key American agricultural products, including chicken, pork, soybeans, and beef. It is worth noting that China is the largest market for U.S. farm exports, taking $29.25 billion worth of products in 2024.

• Fresh tariffs 💴: 15% tariffs on chicken, wheat, corn, and cotton, while soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy face a 10% tariff. However, shipments that left the U.S. before March 10 and arrive by April 12 will be exempt from these tariffs

• Calculated attack 🇨🇳: Analysts believe China’s tariff strategy is deliberately designed to target agriculture-heavy states, applying pressure on Trump’s core voter base

CMA CGM Commits $20 Billion to Enhance U.S. Maritime and Logistics Infrastructure

French shipping giant CMA CGM has announced a $20 billion investment over the next four years to bolster the United States' maritime transportation, logistics, and supply chain capabilities.

This initiative aims to create approximately 10,000 new American jobs. The investment includes expanding the company's U.S.-flagged fleet from 10 to 30 vessels and enhancing container port infrastructures in key locations such as New York, Los Angeles, Houston, and Miami.

Additionally, CMA CGM plans to establish a logistics research and development center in Boston, focusing on advanced robotics and automation to optimize logistics services. This strategic move aligns with the U.S. administration's efforts to revitalize domestic shipbuilding and reduce reliance on foreign shipping entities.

Check out our latest deep-dive: Why Did the U.S. Shipbuilding Industry Sink

TLDR 🗓️

Walmart Caught in U.S.-China Trade War as Beijing Pushes Back

Walmart is facing pressure in China after reportedly asking its suppliers for discounts to offset rising U.S. tariffs imposed by President Donald Trump.

Chinese officials confirmed they had summoned Walmart executives, warning that forcing suppliers to absorb the tariff burden was “unreasonable” and could lead to further action. Trump recently doubled tariffs on all Chinese imports to 20%, prompting Beijing to retaliate with new levies on U.S. agricultural goods.

Retailers like Walmart are caught in the crossfire, with potential price hikes looming for consumers. Bloomberg reported that Walmart sought price cuts of up to 10% from Chinese vendors. China’s state broadcaster accused the company of disrupting fair competition and trade. With over $17 billion in annual sales in China, Walmart risks regulatory scrutiny if tensions continue to escalate.

CVS to Open Smaller Stores with Only Pharmacies

CVS is rolling out a dozen smaller-format stores this year, cutting its traditional retail space and focusing solely on pharmacies. The move is part of a larger restructuring effort that has included closing over 1,000 locations and laying off thousands of employees.

Rising competition from Amazon and big-box retailers like Walmart has forced CVS to rethink its strategy. The new stores will still offer over-the-counter medications but will eliminate snacks, greeting cards, and other consumer goods. Analysts suggest this shift signals CVS’s struggle to defend its front-end retail sales.

Meanwhile, rivals Walgreens and Rite Aid are also undergoing major changes, with Walgreens recently going private in a $24 billion deal and Rite Aid closing hundreds of stores post-bankruptcy.

U.S. Inflation Slows in February, But Tariff Pressures Loom

Americans received some relief as inflation showed signs of cooling last month, with the Producer Price Index (PPI) remaining flat from January and rising 3.2% annually.

Falling energy prices contributed to the slowdown, as wholesale energy costs dropped 1.2% in February. However, core PPI, which excludes food and energy, dipped 0.1%, signaling some volatility. Despite this reprieve, economists warn that new tariffs on steel, aluminum, and imports from Mexico and Canada could push prices higher in the coming months.

Analysts suggest businesses may preemptively raise prices, anticipating trade war impacts. Economists see February’s inflation data as the “calm before the storm,” with tariffs expected to fuel further price hikes in the near future.

GE Aerospace to Invest $1 Billion in U.S. Factories and Supply Chain

GE Aerospace announced a $1 billion investment in its U.S. manufacturing and supply chain for 2025, nearly doubling last year’s spending. The move comes amid strong demand for aircraft engines and spare parts, fueled by a booming travel sector.

$500 million will be allocated to expanding engine manufacturing capacity, while $100 million will support suppliers in upgrading tools and reducing defects.

GE also plans to hire 5,000 U.S. workers, adding roles in manufacturing and engineering to strengthen operations. The investment aims to enhance production efficiency and alleviate supply chain bottlenecks.

Kroger Forms E-Commerce Business Unit

Kroger has launched a dedicated e-commerce division to strengthen its online operations as digital sales continue to grow.

Yael Cosset, previously the grocer’s chief digital officer and CIO, will lead the unit as executive vice president and chief digital officer. The new team will integrate all aspects of Kroger’s digital customer experience, reinforcing its focus on seamless online shopping.

Kroger’s e-commerce sales surged 11% year-over-year, reaching $13 billion in 2024. Despite strong performance, the company has faced challenges scaling its automated fulfillment centers.

Trump's Tariff Uncertainty Fuels Front-Loading

U.S.-bound container volumes surged in early 2025, with the Port of Los Angeles recording its busiest start in 117 years, as businesses rushed to import goods ahead of President Donald Trump’s escalating tariffs. U.S. ports handled 4.3 million TEUs in the first two months of the year, up from 3.91 million last year, reflecting a widespread effort to preempt higher costs.

However, Chinese export growth slowed, and freight rates have declined, suggesting that front-loading may taper off. Experts warn that Trump’s unpredictable trade policy and potential $1.5 million docking fees on Chinese-built vessels could disrupt global supply chains. The IMF has downgraded global trade growth to 3.2%, citing policy uncertainty.

Cocoa and Coffee Markets Face Cash Crunch Amid Historic Price Surge

A record-breaking rally in cocoa and coffee futures has left traders struggling with liquidity, making it harder to ship beans worldwide. Cocoa futures nearly tripled in 2024, reaching an all-time high of $12,906 per metric ton in December, before declining 28% in early 2025—yet still remaining more than twice the decade’s average. Coffee futures surged 20% in 2025, building on an almost 70% increase in 2024, with prices peaking at $4.30 per pound in February 2025.

Major chocolate makers, including Hershey Co., warn that extreme volatility in cocoa futures is distorting the market, with futures prices no longer reflecting real-world supply dynamics.

Hudson’s Bay Files for Bankruptcy

Hudson’s Bay Company (HBC), Canada’s oldest retailer, has filed for creditor protection, blaming a tough post-pandemic retail environment and the impact of U.S. trade tariffs under President Donald Trump.

The company, which operates 80 Hudson’s Bay stores along with Saks Fifth Avenue and Saks Off 5th in Canada, faces a liquidity crisis, with liabilities exceeding assets. Court filings reveal that HBC is unable to pay suppliers and risks missing payroll for its 9,400 employees.

The Ontario Superior Court of Justice has approved CA$16 million ($11 million USD) in emergency financing to support operations during restructuring. HBC plans to close underperforming stores and streamline its business, emerging as a smaller, more sustainable retailer.

Dollar General Reports Sales Growth

Dollar General reported 1.2% same-store sales growth in its fourth-quarter earnings, driven by a 2.3% increase in average transaction value.

However, customer traffic declined by 1.1% due to financial pressures. The discount retailer announced plans to close 96 Dollar General stores and 45 Popshelf locations and convert six Popshelf stores to its flagship brand. Despite these challenges, the company’s stock rose nearly 7% on Thursday.

CEO Todd Vasos warned that 2025 will not bring relief for the company’s core customers, who are struggling with inflation, rising costs, and economic uncertainty. He also pointed to potential headwinds from President Donald Trump’s tariffs and possible changes to government assistance programs like SNAP, which could further squeeze low-income shoppers.

U.S. Convenience Store Sales Declines

​According to market research firm Circana, U.S. convenience stores experienced a 4.3% decline in sales volume in the year ending February 23. This downturn is attributed to rising prices and a shift in consumer behavior toward healthier eating habits.

Notably, sales of rice cakes saw the sharpest decline, followed by dips, nuts, and jerky. Refrigerated product sales decreased by approximately 7%, and chocolate candy sales fell by 6%.​ Industry observations indicate that consumers are becoming more cautious with discretionary spending.

Tidbits 🍿

• Amazon, Google, and Meta have joined a coalition pushing for a tripling of nuclear power capacity by 2050 to meet rising energy demands. The initiative was led by the World Nuclear Association

• Spotify paid the music industry $10 billion in 2024, claiming it as the largest annual payout from a single retailer in history

• In a recent report, U.S. Customs and Border Protection revealed a 36% rise in egg smuggling attempts since October 2024, with the San Diego-Tijuana border surging 158%

• A U.S.-flagged tanker carrying jet fuel was hit by a cargo ship in the North Sea off eastern England, causing explosions, fires, and a fuel spill

Reading List 📚 :

This week's top book picks from CrossDock 📖:

• Dead in the Water by Matthew Campbell and Kit Chellel

• How the World Ran Out of Everything by Peter S. Goodman

Do you have recommendations? Drop us a message, and we will add it to next week’s list.

This newsletter was curated by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!