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Tariffs to Tangle Auto Supply Chains; Flexport Extends Profit Timeline By Mark R. Long

New tariffs on imported cars and auto parts will have an outsize effect on some of the U.S.'s closest allies and trading partners, and disturb the supply chains of major vehicle makers worldwide.

Last year almost half of new passenger vehicles sold stateside were assembled outside the U.S. , with most coming from five nations: Mexico, Japan, South Korea, Canada and Germany. As the WSJ's Yoko Kubota, Stephen Wilmot and Soobin Kim report, autos-and parts-make up a large proportion of these countries' exports , leaving their economies facing stiff headwinds from the new duties.

In addition to finished vehicles, the new tariffs-slated to take effect on April 3-will cover automotive parts, which the administration had considered exempting. Components that comply with a North American free-trade agreement will stay duty-free until the Commerce Department decides how to apply tariffs to non-U.S. content. Adding more of this U.S. content could cut the tariffs automakers pay. The effects of the new tariffs will reach deep into automotive supply chains. In Germany, about a third of small and midsize automotive suppliers surveyed last month expect to be directly affected by the duties.

European and U.K. auto-sector trade groups called on leaders to find a resolution to the planned U.S. tariffs. (WSJ) Automakers' shares fell sharply on the tariff news. (WSJ) Tariff timeline shows back-and-forth showdown with the U.S.'s top trading partners. (WSJ) U.K. car and commercial vehicle manufacturing declined in February , the twelfth consecutive fall. (WSJ) Some drugmakers are sending more medicines by air to the U.S. amid fears the April 2 tariffs announcement could include products made in Europe. (Reuters) CONTENT FROM: PENSKE LOGISTICS Gain a Closer Look. Gain Ground with Penske Logistics.

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Forward Looking

Flexport needs an extra year to turn a profit, after weaker-than-expected demand for e-commerce fulfillment and distribution knocked the tech-focused freight forwarder off its target to be in the black by the end of 2024.

The San Francisco startup's founder and chief executive, Ryan Petersen, tells the WSJ Logistics Report's Paul Berger that demand for fulfillment services is rebounding and that Flexport will be "quite profitable" by the end of this year. Petersen still aims to take Flexport public, but an IPO isn't imminent. He also is mulling a secondary tender offering , to allow investors who have plowed $2.3 billion into the company since its 2013 founding to cash out, while keeping Flexport private.

The company was valued at $8 billion at its most recent funding round in 2022. Flexport doesn't disclose financial statements, but Petersen said the company generated $2.1 billion in revenue last year, up 31% from 2023. Retail Results

Swedish fast-fashion retailer Hennes & Mauritz posted lower-than-expected earnings, pressured by freight costs and other factors. The Journal's Dominic Chopping writes that H&M depends on Asian factories for much of its wares, which left it vulnerable to Red Sea shipping disruptions . The company is bringing more manufacturing closer to its major markets, and is pushing up its inventories-up 9% year-over-year in the latest quarter-to ensure supply of goods.

Fashion retailer Next, a bellwether for the sector in the U.K., raised its sales and profit outlooks for fiscal 2026. (WSJ) Number of the Day In Other News

The U.S. economy grew at a slightly faster pace in the last three months of 2024 than previously estimated, according to the Commerce Department. (WSJ)

The European Central Bank should consider holding its key interest rate at its April meeting as it assesses U.S. tariffs, the governor of Belgium's central bank said. (WSJ)

The number of homes going under contract in the U.S. rose a little on the month but continues to lag the previous year's levels. (WSJ)

The U.S. has deployed B-2 bombers to the Diego Garcia base in the Indian Ocean in a warning to Iran and Yemen's Houthi militia. (WSJ)

Chinese industrial companies' profits declined at the start of the year but showed some signs of improvement. (WSJ)

China told state-owned firms to pause new collaboration with businesses linked to Li Ka-shing after the Hong Kong billionaire irked Beijing with his plan to sell Panama ports. (Bloomberg)

United Parcel Service introduced a new global checkout system that tells customers up front how much they will pay for duties, fees and taxes on international purchases. (Dow Jones Newswires)

California Forever, which is planning a new city in the state's north, proposed a new shipbuilding facility on 1,400 acres near Collinsville, Calif. (American Journal of Transportation)

Uber Freight has extended its drop-and-hook program to target truckload moves in the "tweener" 500- to 1,000-mile range. (Journal of Commerce)

Maritime-technology company Burmester & Vogel acquired laytime-calculation-software firm Laysoft for an undisclosed amount. (Splash 247)

Mitsubishi reached an agreement with Archer Daniels Midland to explore a role in operating the U.S. grain trader's export hubs. (Nikkei Asia)

Proposed U.S. port fees on Chinese ships could force Caribbean islands to find alternate goods sources and increase imports from China. (Lloyd's List)

New York City's economic-development body executed three contracts valued at $18 million to upgrade the Brooklyn Marine Terminal. (Maritime Executive)

Carriers are pulling capacity from the trans-Pacific trade after nine straight weeks of declines in spot freight rates. (The Loadstar)

Tsakos Energy Navigation is looking at selling aging assets after it placed a $1.34 billion new tanker order. (TradeWinds)

Brazilian miner and freight operator Vale agreed to buy 50 new diesel locomotives from Wabtec. (International Railway Journal)

Canada's WestJet Cargo plans to discontinue freighter operations. (Air Cargo News)

Executive Insights

Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.

Pat Gelsinger was ousted as Intel CEO after the board lost confidence in his turnaround plan for the legacy chip maker. Now he's planning a few more technology long shots. A broad cross-section of American business is dialing up its opposition to the Trump administration's plan to impose steep fees on Chinese ships calling at American ports. Southwest, an outlier in the airline industry for its fuel hedging, is ditching the program because it has gotten too costly and hasn't paid off for much of the past decade. SEC Republican Commissioner Hester Peirce would like to see big changes to how the agency creates, and enforces, its rules. About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 28, 2025 07:04 ET (11:04 GMT)

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