Navigating Tariff Impacts, Energy Price Shifts, and Freight Market Trends | Advisor Pulse

The week of April 7-11, 2025, brought continued uncertainty for businesses due to developments in U.S. and international economic policy. Reciprocal and retaliatory tariff adjustments and announcements once again disrupted equities and commodities markets, with occasional price swings echoing the volatility of the previous week.

By the end of the week, many reciprocal and retaliatory tariffs were adjusted or postponed, yet tensions in the U.S.-China trade war escalated. This prolonged the uncertainty over the outcomes and impacts of tariffs.

Below, we share key insights from last week’s market activity and highlight critical indicators to monitor in the coming weeks and months.

1. The pronounced decrease in international oil and diesel prices suggests the market is concerned about slower economic growth. 

Decreasing energy demand at a time when the international supply of crude oil is likely to grow will put additional downward pressure on prices. In April, OPEC increased production by 135,000 barrels per day and was expected to maintain that pace in May. However, the newly proposed increase for May is 411,000 barrels per day - a significant deviation from the initial plan. Reflecting these trends, crude oil prices have recently fallen to their lowest levels since April of 2021.

The combination of tariffs’ potential impact on the international demand for refined transportation products and the likelihood that OPEC nations continue to bring more oil to the market suggest transportation energy prices will have limited upside price risk in the months ahead, especially until there is greater policy and economic clarity. 

2. The resilience of consumers will continue to be tested.

In response to the tariff announcements on April 2, 2025, the National Association for Business Economics issued a flash survey as a follow-up to its initial April Outlook Survey conducted March 18-25, 2025. The initial survey collected in March projected a very limited possibility of a recession occurring during 2025, with only 8% of survey participants suggesting there was a 50% chance or greater of a recession this year. The flash survey conducted on April 7-9 showed 37% of respondents thought there was a 50% chance or greater of a recession during 2025 following the U.S. announcement of reciprocal tariffs and the retaliatory tariff announcements that followed. Panelists predicted tariffs will slow GDP growth, increase the unemployment rate, and increase consumer price levels in the near term. The flash survey showed that panelists did not expect long-term inflation to be impacted by the recently announced reciprocal and retaliatory tariffs.

3. The freight market effects of tariffs have caused regional rate pressures but have not raised rates in aggregate.

Intermodal and cross-border demand benefited from front-loaded freight to end 2024 and begin 2025, but the increased international volumes have not been enough to lift freight rates out of their years-long slump across most equipment types. Through February and March, dry van linehaul rates aggregated across the Breakthrough ecosystem of shippers showed marginal change. Contract rates were flat, while spot rates were about 1.5% higher year-over-year.

Looking Ahead: A Volatile Road for Energy Prices and Uncertainty in the Freight Market