Tariff Developments and Rail Regulatory Updates: What to Know Ahead of April 2nd

This past week brought several important policy announcements with implications for trade, transportation, and logistics. With a series of new tariffs and regulatory developments on the horizon, April 2nd is positioned as a key date for industry watchers.

25% Tariff on Imported Vehicles Set for April 2nd

On Wednesday, President Trump announced a 25% tariff on all imported vehicles, regardless of country of origin. According to the White House press release:

• The tariff is set to go into effect on April 2nd.
• Auto parts covered under the USMCA are currently excluded but will likely be introduced soon, based on the value of non-U.S. content.
• For USMCA-covered vehicles, importers can deduct the value of U.S. content from the total value of the vehicle, lessening the impact of the duties.

Reciprocal Tariffs and North American Trade

Also scheduled to begin April 2nd are reciprocal tariffs on U.S. trade partners. While details are still emerging:

• The President indicated the new measures will be less stringent than fully reciprocal.
• Exemptions may be issued for specific countries or product categories.

In addition, tariffs on goods imported from Canada and Mexico, including those covered under the USMCA, are set to go into effect after a 30-day delay, also on April 2nd. It remains unclear how these tariffs will intersect with the broader reciprocal tariff plan.

Surface Transportation Board (STB) Regulatory Updates

Two notable announcements were made by the Surface Transportation Board (STB):

1. NS–NPBL Acquisition Reclassified as Major Transaction

The STB announced it will treat Norfolk Southern’s acquisition of the Norfolk & Portsmouth Belt Line Railroad Company (NPBL) as a major transaction. NS had requested that the acquisition be considered minor.

• NPBL conducts a significant amount of business with both Norfolk Southern and CSX.
• The Board cited the potentially anticompetitive impacts of the transaction and expressed that at this time they could not conclude that these impacts would be outweighed by the benefits to the public interest.
• As a result of the classification to a major transaction, the acquisition will face greater scrutiny and likely an extended review timeline.

2. Final Offer Rate Review (FORR) Rule Overturned

In August 2024, the Eighth Circuit Court struck down the Final Offer Rate Review (FORR) rule, which aimed to simplify the rate dispute process between shippers and railroads.

• The court determined that the STB lacked statutory authority for FORR and that the rule did not align with Administrative Procedure Act hearing requirements.
• The STB had until March 10th to appeal but chose not to pursue further legal action.

This decision concludes the attempt to implement FORR as a streamlined rate dispute mechanism.

For questions about how these tariff or regulatory changes could impact your business or operations, feel free to connect with me on LinkedIn or reach out directly at jtowers@ftrintel.com.