TAG Industrial Watch: May 17, 2025

The economy received some much-needed good news this week with the announcement of the 90-day trade war truce between the U.S. and China. Instead of 145%, the U.S. dropped its tariff rate on Chinese goods down to 30%, and China reduced its broad tariff rate on American goods from 125% to 10%. Despite the reduction, the U.S. maintains its highest average effective tariff rate at 17.8% since 1934, up 15.4 percentage points since the start of Trump’s second term (CNBC). In other words, we will have to wait and see how the rest of the second quarter shapes up in response to the temporary reduction in tariffs.

Given the massive buildup in business inventories in Q1 in anticipation of higher tariffs, companies could largely hit the pause button and gauge how the economy handles the existing duties. Such a maneuver would likely lead to a significant reduction in economic activity, particularly impacting industrial real estate that depends heavily on imports. Though with the truce only in place for 90 days, American importers could also continue to stack up on inventories, providing some support for the industrial market. No matter what happens, industrial investors should keep their eyes on the bond market, which continues to see interest rates on the highly tracked 10-year Treasury Note ascend. At 4.5% and climbing, this level of interest rates on the 10-year puts pressure on nearly every facet of the economy, including industrial sales activity and market fundamentals. While investors usually take time off in the summer, it might be a good time to take advantage of the current lending environment before rates potentially rise higher.

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I N D U S T R I A L   N E W S

After UK And China Trade Deals,
Tariff Rate Still Highest Since 1934, Yale Report Says
CNBC – May 12, 2025
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Port Traffic Becomes Key Barometer
For Tariffs’ Economic Fallout
GlobeSt.com – May 12, 2025
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Import Cargo To Post First Drop In Two Years; Apartment Developer
Confidence Falls; Fitch Lowers Restaurant Industry Outlook
CoStar – May 11, 2025
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How Tariffs Are Reshaping The Industrial Investment Landscape
And Where Opportunity Lies For Institutional Capital
REjournals – May 8, 2025
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Pause And Effect: Container Rates Await New Demand
FreightWaves – May 13, 2025
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R E G I O N A L   N E W S

Basis Snags 519K-SF DFW Industrial Portfolio
Connect CRE – May 12, 2025
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Triten Real Estate Acquires 4.5-Acre
Industrial Outdoor Storage Facility In Selma, Texas
REBusiness – April 17, 2025
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Tariffs Chill Southern California’s Vast Industrial Property Market
Los Angeles Times – April 10, 2025
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Denver Ranks As 14th Most Active Industrial Market
Mile High CRE – March 31, 2025
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Dallas Sees 8% Jump In Real Estate Values,
Led By New Homes And Industrial Growth
CandysDirt.com – May 14, 2025
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