At Border States, keeping you informed is a top priority. In this month’s supply chain update, we share our latest insights across the core markets we serve (construction, industrial, utility), where we see both persistent challenges and notable signs of stability. While we work diligently to provide you with the most current and up-to-date information, the content of this newsletter remains volatile and is subject to change at any point.
As we move into September, the global supply chain continues to present a dynamic and complex landscape for our customers. Geopolitical conflicts, high interest rates and broader economic uncertainty are still creating challenges. Pricing remains volatile, both for finished goods and commodities. This continues to be driven by evolving tariffs and trade negotiations. The copper market saw extreme volatility for example. This was due to tariff negotiations and policy announcements that led to both record-high prices and the largest single-day decline on the COMEX index
Lead Time Trends
Lead time changes over the last 12 months:
| Market | Difference |
|---|---|
|
Natural gas/PVF
|
-33%
|
|
Utility
|
-41%
|
|
Industrial
|
-38%
|
|
Construction
|
-17%
|
August job growth points to a cooling U.S. labor market
The United States employment data continued a trend of weak growth, with 22,000 jobs added in August. Job gains are primarily seen in the healthcare industry; however, wholesale trade and manufacturing both saw declines of 12,000. The unemployment rate rose to 4.3%, the highest in nearly four years, while the labor force participation rate slightly increased to 62.3% from 62.2%.
The big picture: The cooling labor market, underscored by the lowest job openings since 2021 and downward revisions of early payroll numbers, is compounded by economic uncertainty from tariffs and inflation alongside broader indicators, like the Leading Economic Index performing below expectations.
The Producer Price Index (PPI) unexpectedly declined 0.1% in August after July’s figure was revised down to 0.7%. The annual PPI basis saw a 2.6% gain, still above the Federal Reserve’s (Fed) 2% target but lower than last month’s 3.3% figure. The Consumer Price Index (CPI) rose 0.2% in August, setting the annual inflation rate at 2.9%, a 0.2% jump from last month. Both figures are the highest since January.
Why it matters: CPI gauges the current state of inflation as it measures changes in prices consumers pay for goods and services. PPI offers insights into future pressure because it tracks price changes before they reach consumers. Both guide the Fed’s monetary policy stance and tie to its dual mandate as interest rate adjustments aim to balance inflation control with sustainable economic growth.
U.S. import volumes hold near record highs
August U.S. container import volumes remain strong compared to prepandemic levels, exceeding 2.5 million TEUs (20-foot container equivalent). This is the second highest month this year, but volumes are slowly shifting away from China and other Asian countries.
The big picture: Despite a 4% decline from July, August figures are 2% higher than the previous year and 18% above prepandemic levels.
By the numbers: While overall imports remain strong, trade with China is declining, with August imports down 6% from July, 11% year-over-year and 15% from peak levels, largely due to tariffs.
Yes, but: Average ocean container rates continue to soften, down 57% over the past year, as overcapacity and softer demand counterbalance the effects of geopolitical disruptions. Shipping risks through the Red Sea remain elevated, with major carriers continuing to reroute around the Cape of Good Hope, adding roughly two weeks to global sailings.
Trucking recession lingers
The U.S. trucking industry remains in a freight recession, with demand continuing to lag behind historical averages despite some seasonal upticks in volume, like harvest season.
Why it matters: Elevated costs and low rates are forcing smaller carriers and owner-operators out of the market, yet overcapacity still exists.
By the numbers: Spot rates remain near historic lows despite a slight increase, keeping the market highly competitive. A 20% year-over-year drop in new class 8 truck orders indicates carriers’ caution and uncertainty about the market’s future.
The bottom line: Some forecasts show a potential market rebalance and improvement in 2026, but the timeline for recovery remains unclear.
Critical minerals tariff policies come under legal scrutiny
President Trump’s tariff policies have been under legal scrutiny. A federal appeals court recently upheld a lower court’s ruling that Trump’s use of the International Emergency Economic Powers Act (IEEPA) was unlawful and exceeded his executive powers.
The Trump administration’s particular focus on critical mineral policies aims to secure a sustainable supply of raw materials for clean energy, defense and technology sectors. The goal is to reduce reliance on foreign sources, particularly China and Russia, while protecting domestic industries and ensuring national security.
Why it matters: Trump’s critical mineral policies and tariffs can often intersect. For example, if the United States imposes tariffs on rare earth imports from China, it could reduce America’s reliance while also encouraging domestic and allied-country production.
What’s next: On September 9, the Supreme Court agreed to review the legitimacy of Trump’s tariffs under IEEPA. The court will begin hearing arguments in early November. The tariffs remain in effect while litigation continues.
Dive in: President Trump has applied several legal authorities to impose tariffs.
- IEEPA gives the president power to regulate various financial actions after declaring a national emergency. President Trump used it to invoke reciprocal
- Section 232, aimed to protect U.S. national security, was used to impose a 50% tariff on copper, 50% on aluminum and steel, and 25% automobiles and automotive parts; however, it could expand to rare earth minerals if foreign dependence is deemed a security threat.
- Section 301 authorizes the U.S. Trade Representative to investigate unfair foreign trade practices. It could be used to address China’s subsidies or export restrictions on rare earth minerals.
- Section 201 is a safeguard tool to provide temporary relief to an industry if a flood of cheap foreign minerals undercuts U.S. producers.
The bottom line: As the United States navigates the complexities of global supply chains, critical minerals and tariff tools could play a central role in securing a reliable and stable supply chain while supporting domestic growth.
