Tariffs on Steel and Aluminium, Panama Sides with US, America to Become Penniless

Welcome to CrossDock’s Weekly Dispatch,

We’re back with the key stories shaping supply chain, e-commerce, logistics, and retail. From tariffs on steel and aluminum imports to Shopify’s impressive Q4 2024 performance, here’s a look at last week’s key developments. Let’s dive in.

Big News 📣

President Trump Imposes 25% Tariffs on Steel and Aluminium

On February 11, 2025, President Donald Trump announced the reinstatement of a 25% tariff on steel imports and an increase to 25% on aluminum imports, effective March 4, 2025. This action removes previous exemptions and alternative agreements, applying uniformly to all countries.

The administration justifies these measures under Section 232 of the Trade Expansion Act of 1962, citing national security concerns and the need to protect domestic industries from unfair trade practices and global excess capacity. The tariffs also extend to downstream products, including fabricated structural steel and aluminum extrusions.

• International reaction 🌎: The European Union plans to implement "firm and proportionate countermeasures" in response to the U.S. tariffs. Japan has formally requested an exemption from the tariffs. In the United Kingdom, industry leaders express concern over potential impacts on manufacturing exporters
  

• Auto chaos 🚘: Ford CEO Jim Farley described these tariffs as causing "a lot of costs and a lot of chaos" within the automotive industry. Farley emphasized that such measures could be "devastating" to the U.S. auto sector
  

• Plastic treatment🥤: Coco-Cola CEO James Quincey stated that if aluminum cans become more expensive due to tariffs, the company may use PET plastic bottles to maintain affordability
  

• Task force 💼 : U.S. President Donald Trump has directed his economic team to develop reciprocal tariffs on all countries that impose duties on American imports

Nippon Steel to Invest in U.S. Steel, Foregoing Acquisition

President Donald Trump announced that Japan's Nippon Steel has agreed to forgo its nearly $15 billion bid to acquire U.S. Steel and will instead "invest heavily" in the company. The specifics of this investment remain undisclosed, but Trump plans to meet with Nippon Steel executives next week to discuss details.

In a recent interview with NHK, Japanese Prime Minister Shigeru Ishiba clarified that Nippon Steel's planned involvement with U.S. Steel will be an investment rather than an acquisition. He emphasized that U.S. Steel will remain an American company, managed by Americans and employing American workers.

• Background 🔎 : In December 2023, Japan's Nippon Steel proposed a $14.9 billion acquisition of U.S. Steel. However, in January 2025, President Joe Biden blocked the deal, citing national security concerns.
  

• Lawsuits ⚖️: Both companies filed lawsuits challenging the decision. They argued that the block violated their constitutional right to due process. Additionally, they filed a lawsuit against Cleveland-Cliffs, its CEO Lourenco Goncalves, and United Steelworkers President David McCall, alleging illegal collusion to prevent the acquisition.

Panama Exits China’s Belt and Road Initiative

Panama announced its withdrawal from China's Belt and Road Initiative (BRI), becoming the first Latin American country to do so. This decision followed a meeting between Panamanian President José Raúl Mulino and U.S. Secretary of State Marco Rubio, during which the U.S. expressed concerns over China's influence on the Panama Canal.

China criticized the move, accusing the U.S. of "pressure and coercion" in Latin America. Panama joined the BRI in 2017, aiming to enhance infrastructure development and economic ties with China. The withdrawal marks a significant shift in Panama's foreign policy and reflects growing U.S.-China tensions in the region.

P.S.: Panama was the first Latin American country to join the BRI in 2017. Interestingly, it is also the first Latin American country to exit from it.

Read More: The Canal Wars - Why the US wants Panama back?

Retailers Increase Imports Ahead of Rising Tariffs

According to the Global Port Tracker report by the National Retail Federation (NRF) and Hackett Associates, U.S. container ports are experiencing elevated import volumes as retailers expedite shipments to circumvent impending tariffs on Chinese goods.

Retailers have been frontloading imports of key products for several months because of the potential for the East Coast/Gulf Coast port strike in January, as well as to get ahead of potential tariffs from President Donald Trump.

In December 2024, ports handled 2.14 million Twenty-Foot Equivalent Units (TEU), a 14.4% increase year over year and a record for the month. Projections for early 2025 indicate continued high import levels, with January estimated at 2.11 million TEU (up 7.8% year over year) and February at 1.96 million TEU (up 0.2%).

TLDR 🗓️

Shopify’s Q4 Profit Doubles as Revenue Surges 31%

✅ Strong profit growth: Shopify’s Q4 net income doubled to $1.29 billion (99 cents per share) from $657 million (51 cents per share) a year ago. Adjusted earnings per share were 44 cents, beating analysts' expectations of 35 cents

✅ Revenue Surge: Total revenue rose 31% year-over-year to $2.81 billion, surpassing the $2.72 billion forecasted by analysts

✅ GMV & Market Expansion: Gross Merchandise Value (GMV) grew 26%, its highest rate since the pandemic, with major brands like Reebok, Warner Music Group, and FC Barcelona expanding on Shopify.

✅ Milestone Achievement: Shopify has now processed over $1 trillion in total transactions, with more customers adopting Shop Pay for online payments.

✅ 2025 Outlook: Revenue is expected to grow in the mid-20% range, with gross profit increasing at a low-20% rate, while Q1 operating expenses are projected to be 41-42% of revenue due to seasonal trends.

Retail Sales Decline in January but Show Strong YoY Growth

U.S. retail sales fell 1.07% in January from December but remained 5.44% higher year-over-year, according to the CNBC/NRF Retail Monitor. Core retail sales, excluding restaurants, auto dealers, and gas stations, dropped 1.27% month-over-month but increased 5.72% from last year.

NRF President Matthew Shay attributed the decline to consumers pausing after a strong holiday season, while overall spending remains supported by a strong job market and wage growth.

December had seen stronger gains, with retail sales up 1.74% month-over-month and 7.24% year-over-year. Despite the January pullback, retail sales grew 4% year-over-year during the 2024 holiday season and 3.6% for the full year.

Google’s AI Updates Boost Shopping Platform Usage by 13%

Google’s latest AI-driven enhancements have significantly increased engagement on its U.S. shopping platform, with daily active users rising 13% in December 2024 compared to the same period in 2023, stated Philip Schindler, Google's Senior Vice President and Chief Business Officer, during Alphabet’s Q4 2024 earnings call.

The company introduced AI-powered features, including automated product recommendation summaries and personalized shopping feeds, designed to enhance user experience and streamline online shopping. Executives expect 2025 to be a transformative year for AI in retail, with new technology reshaping how consumers browse and purchase products.

US to Become Penniless?

President Donald Trump has ordered the U.S. Mint to stop producing new pennies, arguing that the coin costs more to manufacture than its actual value. In a Truth Social post, Trump called the move a step toward cutting government waste, though legal experts note that Congress holds exclusive coinage authority.

The U.S. Mint spent 3.69 cents per penny in 2024, marking the 19th consecutive year of production costs exceeding face value. Analysts predict a penny shortage, which could accelerate the shift toward electronic payments. The decision also raises concerns that the nickel, which costs 13.78 cents to produce, may be next in line for elimination

Chocolate Prices Rise as Cocoa Costs Hit Record Highs

Chocolate prices are expected to increase by 10-20% this Valentine’s Day, as cocoa prices have more than doubled since early 2024.

Cocoa hit a record $12,646 per metric ton in December due to bad weather and disease in West Africa, which produces 70% of the world’s cocoa. The cost of making chocolate has jumped 167% in two years, forcing brands like Lindt and Hershey’s to raise prices.

A 5.7 oz Lindt Valentine’s box now costs $21.99, while a 1-pound Hershey’s bar sells for $14.99. Analysts warn prices could stay high throughout 2025 as cocoa supply remains tight. Meanwhile, countries like Ecuador are increasing cocoa production, but new trees take 4-6 years to grow.

Chinese Chipmaker Sees Surge in Orders Amids US Tariffs

China’s largest semiconductor maker, SMIC, has reported a sharp rise in orders as businesses rush to secure inventory before potential U.S. tariffs and trade restrictions.

Speaking to investors and reporters, EO Zhao Haijun said many customers have requested early deliveries for orders initially scheduled for later in 2025. Despite this surge, SMIC warns of a possible chip oversupply in the second half of the year as production capacity increases across the industry.

To boost China’s semiconductor self-sufficiency, SMIC has steadily increased capital spending, rising from $4.5 billion in 2021 to $7.5 billion in 2025. While reports suggest SMIC produces chips for Huawei, the company has not confirmed its role in advanced chip manufacturing.

Egg Prices Soar, Retailers Limit Purchases Amid Shortages

The cost of eggs in the U.S. surged over 15% year-over-year in January, reaching $4.95 per dozen, which is five times higher than the overall 3% inflation rate, according to the Consumer Price Index. In response, major retailers are limiting egg purchases to manage supply shortages.

🥚 Walmart: Limits 60-count cartons to two per purchase to ensure availability for more customers.

🥚 Sam’s Club: Restricts egg purchases to two per item across its 600 U.S. locations.

🥚 Target: Most stores have no restrictions, except Hawaii locations, where limits are in place.

🥚 Kroger: No company-wide cap, but some stores restrict purchases to two dozen per visit.

🥚 Giant Eagle: Selling eggs at or below cost and encourages customers to limit purchases to three cartons

🥚 Waffle House: Imposed a 50-cent surcharge per egg due to rising costs.

Trump Policies Cut Offshore Wind Support and Disrupt Supply Chain

The U.S. offshore wind industry is facing major setbacks as the Trump administration rolls back federal support, leading to project delays and cancellations. The policy shift has disrupted the industry’s supply chain, forcing key players like GE Vernova and Prysmian to abandon investment plans. As a result, offshore wind capacity projections have dropped below 25 gigawatts by 2030, falling short of the 30-gigawatt goal.

Industry experts warn that weakened federal backing is driving investors away and increasing uncertainty for renewable energy projects. The move reflects the Trump administration’s broader focus on traditional energy sources over renewable initiatives, raising concerns about the future of clean energy development in the U.S.

Chittagong Port Faces Severe Congestion

Chittagong Port in Bangladesh is currently experiencing significant congestion due to recent transport worker strikes. As of this week, 14 container ships are anchored at the outer anchorage, with some waiting up to five days for berthing. The congestion began on February 4, following attacks on transport workers, which led to strikes and a suspension of container transportation until February 7.

This disruption has resulted in vessel delays and a backlog of containers, exacerbating congestion at private inland container depots responsible for outbound shipments. Port officials estimate that it will take approximately two weeks to clear the backlog and restore normal operations.

It is worth noting that the port's efficiency directly impacts the timely delivery of garments to major markets like the United States and the United Kingdom. In 2023, Bangladesh exported $7.49 billion worth of textiles to the U.S. and $4.05 billion to the U.K.

Key Takeaways from ATRI’s 2025 Top Truck Bottlenecks Report

• Most Congested Location: The I-95 and SR 4 interchange in Fort Lee, New Jersey, remains the worst freight bottleneck in the U.S. for the seventh consecutive year
  

• Nationwide Congestion Impact: The report highlights that truck delays are equivalent to 436,000 drivers sitting idle for an entire year, leading to $109 billion in additional transportation costs annually
  

• Top 10 Worst Bottlenecks: Major congestion hotspots include Chicago (I-294 at I-290/I-88), Houston (I-45 at I-69/US 59), and multiple locations in Atlanta, where average rush-hour truck speeds have fallen to 29.7 mph
  

• Environmental and Fuel Impact: Trucks stuck in traffic burned 6.4 billion gallons of diesel fuel, releasing over 65 million metric tons of carbon emissions into the atmosphere

• Call for Infrastructure Investment: The report urges targeted highway infrastructure projects to reduce congestion and improve supply chain efficiency

Tidbits 🍿

• Chinese fast-fashion retailer Shein has re-entered the Indian market nearly five years after its ban in 2020 due to data security concerns amid India-China border tensions. This comeback is facilitated through a strategic partnership with Reliance Retail, a subsidiary of Reliance Industries

• Amazon inaugurated its first physical retail store in Europe, named Amazon Parafarmacia & Beauty, located in Milan's city center. The store offers a curated selection of beauty and personal care products from renowned brands
  

• TikTok, which was removed on Jan 18, 2025, has been reinstated on Apple's App Store and Google's Play Store in the U.S.

• Shopify has removed Kanye West’s Yeezy clothing website, citing violations of its terms of service.

This newsletter was written by Shyam Gowtham

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