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The month of August brought a new crop of supply chain news and events, some of which were global in nature (e.g., the reignited U.S.-Canadian trade war) and others were focused on individual companies, including UPS’ supply chain business investment and retailer Best Buy hitting its zero waste goals.
As the component shortage drags on, driven largely by surging demand from AI data centers, lead times are stretching and prices are climbing. Distributors and buyers are getting creative about how they source those products and keep their own customers supplied.
Here’s a roundup of the news events and developments impacting global supply chains over the last month, and where things stand as we head into September.
De Minimis Won’t Be Back
Ever since Congress created Section 321 of the Tariff Act in 1938, imported shipments worth less than a certain amount (most recently $800) were generally exempt from customs duties and the laborious entry process. That changed last year, when the de minimis exemption was suspended on a global basis.
Detroit Axle filed suit in the U.S. Court of International Trade, arguing that President Trump didn’t have the authority to eliminate the exemption under the International Emergency Economic Powers Act (IEEPA). In August, the Court upheld the government’s decision to suspend de minimis.
According to CNBC, a three-judge panel found that the statute does allow Trump to scrap the de minimis exemption. “They concluded that, unlike in key cases challenging Trump’s global tariffs, the rescission of the duty-free loophole is not an exercise of the power of the purse,” CNBC reports, “and is not an exercise of the power to legislate.”
Tit for Tat
The U.S. government kicked off another round of tariff wars in August, this time with major trading partner Canada. The countries not only share a major border, but they also trade about $872 billion in goods and services annually.
“Most recently, in 2024, Canada was the top destination for U.S. exports and the third-largest source of U.S. imports,” the Office of United States Trade Representative states. “Canada exported over three-quarters of its goods to the United States and imported almost half of its goods from the United States.”
The U.S. imposed tariffs of up to 50% on $27.6 billion (Canadian) worth of Canadian goods, including products in sectors already impacted by U.S. steel, aluminum and other trade measures, Reuters reports. The move followed several days of negotiations that appeared to be coming to an agreement, then collapsed over unresolved issues including steel, aluminum, autos and softwood lumber.
Ottawa then matched the U.S. tariffs dollar for dollar, imposing tariffs of 15%, 25% and 50% on $27.6 billion (Canadian) worth of U.S. imports. The Canadian list targets products like steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics. Canada subsequently removed U.S. fish and seafood from the retaliation list, while Saskatchewan separately announced a 50% tariff on U.S. alcohol.
Chips are Scarce and Expensive
The electronics manufacturing supply chain is facing renewed and measurable pressure on component and materials availability, and conditions are worsening, according to the Global Electronics Association’s latest Global Sentiment Survey. According to GEA, memory products and laminates and resins ranked as the leading sources of supply disruption (16% each), followed closely by microprocessors and GPUs (14%) and passive components (11%).
The association says nearly two-thirds (64%) of global electronics manufacturers report that the components and materials they rely on are available only with limited availability or extended lead times. “Not a single respondent described current market conditions as ‘readily available with excess supply,’” GEA adds. “The pipeline is stretched and getting longer.”
In Other News
United Parcel Service (UPS) is investing more than $2 billion into its business across its international, healthcare and supply chain solutions businesses, CNBC reports. The company wants to help businesses move faster and stay adaptable to changing macroeconomic pressures and global supply chain disruptions. Some of the projects under the investment include a new hub in the Philippines this year, a new Canadian facility opening next year in Ontario and a new air hub at Hong Kong International Airport in 2028.
Also last month, Best Buy announced that it reached its goal of TRUE-certifying (Total Resource Use and Efficiency) all 29 of its supply chain facilities as “zero waste.” Some of its strategies include reusing pallets and totes, adding labeled recycling and compost bins, organizing employee Green Teams and repurposing Styrofoam. “We are proud of this milestone and the progress we’ve made in driving forward the circular economy through our zero waste goals,” said Tim Dunn, head of environmental sustainability, in a press release.
