Tariffs: The New Game of Whac-a-Mole

By Leslie Meredith

One tariff disappears, another pops up, as project cargo grapples with shifting trade policies. Companies including Fluor, DHL, Jade Management and AAL share the tactics helping them control costs and maintain momentum.

From Issue 2, 2026 of Breakbulk Magazine.

(5-minute read)

Despite news headlines, Trump’s tariffs did not disappear after the U.S. Supreme Court ruled against the International Emergency Economic Powers Act (IEEPA) duties in February. The administration moved quickly to replace some of the lost revenue under other tariff laws. Just as quickly, manufacturers, importers and trade groups moved to protect their right to refunds or challenge the new tariff schemes.

Market certainty continues to elude our grasp, but the challenges are clear. Gautham Krishnan, logistics expert for global EPC Fluor, said: “Ongoing changes to tariff regimes and evolving trade policies have reduced predictability in material pricing and availability, making it increasingly difficult to lock in cost and schedule certainty over the project lifecycle.”

While the recent court decision wiped out about 60% of the tariffs put in place in 2025 under the IEEPA, the other 40% stayed in place because they were imposed under different legal authorities. That included a 10% global tariff, imposed under Section 122 of the Trade Act, which is now in litigation.

In a dizzying chain of legal proceedings, the U.S. Court of International Trade ruled the Section 122 tariff unlawful on May 7 in a 2-1 decision, though relief was limited to three named plaintiffs; claims by others were dismissed because they couldn’t prove direct financial harm to themselves as importers. Then the Federal Circuit stayed (paused) the order on May 12, so Customs and Border Protection (CPB) continues to collect Section 122 duties on all importers while an appeal proceeds. This particular tariff is temporary and will expire July 24 unless Congress extends it.

That temporary status has done little to calm the market. Procurement teams are being asked to make sourcing decisions for projects that stretch years into the future while tariff structures can change within days. The current environment has become a pay-now, litigate-later system, with importers often forced to absorb duties upfront while court challenges move slowly through the system.

Refunds Add Another Layer

The refund question is becoming its own source of confusion. After the Supreme Court ruling, companies that paid IEEPA tariffs began looking for ways to recover those duties. CBP has been building a refund process through CAPE, its Consolidated Administration and Processing of Entries system, while importers and their lawyers sort out whether to file administrative claims, lawsuits at the Court of International Trade or both.

The refund does not automatically go to the company that ultimately absorbed the cost. It generally follows the customs entry, which means the importer of record or its authorized broker is the party positioned to seek repayment. In project cargo, that could be the owner, supplier, EPC, distributor or another contracting party, depending on how the transaction was structured. That makes contract language and entry records more important than ever.

Metals Tariffs Skyrocket

But it is the modification of Section 232 tariffs on steel and aluminum that may hit project budgets hardest. When Carga general surveyed 10 senior industry leaders last July about the federal policies having the biggest effect on project work, metals tariffs led by a wide margin. And these tariffs just got a lot higher.

Until early April, the steel, aluminum and copper used in power equipment and other industrial goods were taxed at 25%. After the IEEPA tariffs were deemed illegal, the administration expanded Section 232 so the tariff could be based on the full value of the item, not just the value of the metals inside it, as long as they made up more than 15% of the item’s total weight.

That change is a big deal for project cargo. Take a $250,000 transformer weighing 27,000 kilograms, the kind used in a medium-sized substation. Its steel and copper are worth around $45,000 and account for 25% of its weight. Before the April 6 expansion, the importer would have paid $11,250 in tariffs, based on 25% of the metals value. After the change, the tariff jumped to $62,500.

Procurement Strategies Redefined

Project owners are pausing to recalculate. “Each project is different, however we have seen delays as projects reassess costs and determine whether to change their sourcing strategy in order to deal with the new tariff landscape,” Jake Swanson, CCO of DHL Industrial Projects, said.

Carriers are seeing the same response from cargo owners. John Pittalis, head of communications at Singapore-based AAL Shipping, said increased duties on Chinese-manufactured goods, “including industrial equipment, steel and renewable energy components, along with changing import regulations,” have prompted customers to “reassess sourcing locations, procurement timelines and shipping routes.”

Fluctuating tariffs are also changing the equation for procurement teams. Krishnan said Fluor is responding on three tracks: a “best-cost sourcing model” that weighs total landed cost, including tariffs, logistics, supplier capacity and schedule resilience, against execution certainty; price-variation clauses with suppliers to reduce upfront contingencies; and hedging.

Silver Lining

Grant Wattman, president of Jade Management, a project logistics consultancy, said tariffs have “accelerated the need for being agile and being prepositioned with alternatives, up to and including accelerating project delivery timelines.”

Forwarders are also finding benefits. “From a freight forwarder’s perspective, it has allowed us to help provide additional solutions to our customers,” Swanson said. “In some cases we are able to engage with them earlier as they look to determine the best sourcing options that they have by helping them to review their total landed costs.”

This shift means logistics providers are actively modeling alternative sourcing scenarios, estimating tariff exposure and mapping out backup routes to outmaneuver delays before a single piece of equipment leaves the factory, adding new layers of risk management.

For project cargo, the whacka- mole problem is certainly compounded by the number of tariffs in play, but it is also the speed at which one ruling or replacement authority can alter the cost basis for equipment that may already be on the water. In this environment, closer coordination between EPCs, forwarders and carriers has become a necessity, not a nice-to-have.

Trade policy uncertainty will be one of the issues covered by former Dutch ambassador Ron Keller during his keynote presentation at Breakbulk Europe 2026. The End of Predictability: Geopolitics and the New Reality for Global Trade will take place on the Breakbulk Live Stage on Tuesday, 16 June from 11:45am to 12:20pm.

Top photo: Whac-a-Mole image generated by ChatGPT
Second: Jake Swanson, DHL Global Forwarding