At 11am last Thursday, the day after President Donald Trump declared that he had wiped out new tariffs under what he called “liberation day,” Ryan Petersen was living on camera, asking questions from a virtual room packed with more than 2,300 uneasy customers. The founder and CEO of Flexport, a global logistics and customs brokerage company, now 12 years old, had studied fine printing himself the night before, preparing to explain a spectacular new reality for our importers.
“We’ve broken the live streaming platform,” Petersen joked that night at TechCrunch’s StrictlyVC event in San Francisco. “We need to get better.”
Within 24 hours, the world of world trade was turned upside down. The 79% cumulative tariff will soon apply to various products in China, including sofas. The direct-delivery model for consumers is once protected by a minimum tax-exempt threshold of less than $800 and is subject to new customs obligations. Meanwhile, US ports are proposing rules that allow you to slap maritime airlines up to $1.5 million per port, even if the ship is made in China or you are ordering it.
“It’s scary for customers,” Petersen said at the event. “For some of these companies, for many customers. [the spate of changes] It becomes an existential decision of life and death. ”
Flexport, one of the largest customs brokerages in the United States, had no choice but to step up quickly. Already this year, Petersen has spoken directly with 200 customers, many of whom say they are heavily dependent on Vietnam for production.
However, Petersen said he was not surprised that Vietnam was slapped at 46% tariffs. “I thought there was a job everywhere, and that’s what we saw.”
The real surprise he pointed out, he noted, was the lesser-known announcement that the US would shut down its De Minimis program globally for imports. The change will affect the business models of ecommerce giants like Temu and Shein, as well as thousands of Shopify-based stores handling fulfillment from nearby Mexico.
“Over 30% of all e-commerce brands (large brands) have set a fulfillment in Mexico,” explained Petersen. “So it all goes away, or at least it’s the tax-free aspect.”
Petersen is a so-called founder mode follower who talks to up to 50 employees a day and didn’t wait to reveal his words. “I had to dig into it and try to understand this,” he told the audience. “And when I began to feel like we understood, I wrote a blog post about de Minimis. [also] I first realized that the semiconductor had been cut out. I was one of Nvidia’s biggest investors saying, “Where are you watching this?” I’m ‘That’s it [says it in the new law]. ‘”
Naturally, as Petersen explained, efforts to provide shortly after Trump’s new tariff war were more than just logistical guidance. It was stability. Flexport employees certainly needed it. “The rule at risk is that everyone gathers around the calmest person in the room,” Petersen said. “You know, you’re a company leader. Even if you’re inside, you can’t be surprised. Your company is shocked.”
The cooler head is what Flexport customers currently need. With the customs tables, customs regulations and shipping costs all in liquidity, our clients rely on Flexport to understand what feels like a complete mess.
And there’s more confusion looming. The pending proposal from US trade representatives threatens to charge incredible port fees on Chinese-made vessels, and even ships owned by Chinese-made vessels, in their fleets.
“They say they’re going to charge a fee… If the ship is made in China, I think it’s a million dollars… every time they come to the US it’s a million and a half,” Petersen said.
According to the administration, the goal is to inspire American shipbuilding. In Petersen’s view, perhaps the outcome is a broader cost that is passed on to US importers, and many maritime workers lose their jobs to minimize the number of stops the ship makes.
Despite all the chaos, Petersen is not ready to call it the end of free trade. “This is probably not permanent,” he said. “I spoke to one of the cabinet members. He told me that the day of release would be the start, not the end of the process.”
He said several countries were encouraged to respond ahead of the Trump administration’s maneuvering. “Vietnam and Israel both came to the table and eliminated all obligations on American goods this week,” Petersen pointed out.
It may provide a path forward, including quiet negotiations, mutual dealings and a reshaped global supply chain. In the meantime, Petersen and his team are answering calls, tweeting storms, keeping their supply chains moving, and breaking down the webinar platform to keep freakouts at bay.
You can check out that complete interview. Petersen can also find out below about AI and why he accepted Founder Mode.
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