Trump’s unchecked tariff power is undermining U.S. economy and freight stability

Thus far, 2025 has seen an uneasy calm for U.S. freight markets, with modest upticks in short- and medium-haul routes and hesitation in flows. But President Donald Trump’s tariffs, including the uncertainty of when and at what level they will be imposed, have decreased trade volumes. The president’s tariffs are negatively affecting both Main Street and Wall Street.

To prevent problems from worsening, Congress should reassert its constitutional authority over tariffs and rein in the executive branch as the framers intended.

The good news is that the courts may do this for Congress. As CNBC reported:

A federal appeals court ruled that most of President Donald Trump’s global tariffs are illegal, striking a massive blow to the core of his aggressive trade policy.

The U.S. Court of Appeals for the Federal Circuit held in a 7-4 ruling that the law Trump invoked when he granted his most expansive tariffs — including his “reciprocal” tariffs — does not actually grant him the power to impose those levies.

“The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution,” the court said. “Tariffs are a core Congressional power.”

Thankfully, U.S. markets have shown signs of resilience despite economic instability. But even where pockets of improvement appeared, they felt fragile and reactive. The U.S. Bank Freight Payment Index increased in the second quarter, with shipment volumes climbing 2.4% compared to the first quarter. But that snapped a string of weak quarters rather than signaling a robust recovery. The quarter-to-quarter bounce appears to be a short-term rebalancing, rather than robust demand growth. 

What does this short-term rebalancing look like?

When trade restrictions are threatened or implied, importers accelerate orders to beat potential levies. When those threats recede, ordering often collapses just as quickly. That behavior, known as frontloading, produces a brief surge in bookings and port activity, followed by a sharp slowdown that distorts normal seasonality and makes planning more challenging for carriers and terminal operators.

Recent reporting from Reuters shows that Asia-U.S. sea freight rates swung sharply and booking patterns spiked, only to drop as tariff negotiations and deadlines played out. 

Operationally, frontloading shows up in container bookings and truckload demand. Industry trackers note a big, fast swing: ocean bookings and import flows surge during windows of tariff uncertainty and then fall off as the situation cools, leaving carriers with lumpy schedules and excess capacity on certain lanes.

FreightWaves’ coverage of import bookings highlight that ordering peaks in late June or early July and then declines. This is the pattern one would expect when frontloading replaces steady, demand-led ordering. 

The domestic market is fragmenting. Long-haul truckload demand has cratered in many of the major transcontinental lanes—FreightWaves’ analysis shows long-haul truckload demand down roughly 25% year-over-year as shippers shift more middle-mile volume to intermodal rail or delay moves altogether. This decrease is statistically significant and appears to indicate that shippers are adjusting their behavior in response to policy uncertainty.

That behavior has ripple effects. Carriers and owner-operators respond to lumpy demand by pruning capacity, which in turn makes rates volatile when a temporary surge arrives. With less available capacity, when a surge of demand hits, rates will rise faster than if carriers had not reduced capacity.

At the same time, intermodal rail has gained market share as shippers seek lower transportation costs for long-distance shipments. FreightWaves’ white paper shows exactly this dynamic: Ocean spot rates and bookings can spike, regional truckload markets can tighten or soften rapidly, and intermodal rail often reclaims long-haul work during periods of trucking softness. 

If policymakers want freight to stop reacting to every headline and start reflecting real, demand-driven movement again, clarity and predictability are the obvious place to start. Reasonable steps include committing to clear timelines and narrow scopes for trade measures, communicating tariffs and trade policy intentions well in advance when possible, and coordinating with industry to limit surprise disruptions.

On the industry side, shippers and carriers should accelerate the adoption of adaptive practices already in evidence—dynamic inventory strategies, greater modal agility (allowing volumes to shift to intermodal when appropriate), and investment in near-real-time analytics that reduce reaction lag.

The easiest solution to this problem is for Congress to reassert its authority on trade, though it seems unwilling to do so—so far. Under the U.S. Constitution, Congress has the sole authority to regulate foreign commerce and levy tariffs on imports. The president is not intended to legislate with the stroke of a pen. Trade agreements are meant to be negotiated, with congressional debate, and executed by the executive branch, not written and implemented by the president and the president alone.

To that end, Congress could begin by holding hearings to examine recent executive trade actions, introduce legislation to reaffirm its constitutional role in approving trade agreements, and amend existing statutes—such as the Trade Expansion Act of 1962, Trade Act of 1974, and International Emergency Economic Powers Act of 1977—to limit unilateral executive changes to tariffs and trade terms.

Tariff threats will always be a lever in geopolitics and trade negotiations (despite their poor track record), but when they are wielded without clear implementation plans or predictable timing, they create a costly, avoidable drag on freight markets. Until President Trump’s tariffs are checked by Congress and the courts, and businesses receive a steadier signal, expect the freight markets’ natural rhythms to be punctuated by sudden surges and equally abrupt retreats for the foreseeable future.

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