As 2025 kicked off, international markets were already jittery. Businesses across sectors were struggling to plan ahead due to ongoing trade uncertainties between the world’s two largest economies—the United States and China. While this feud wasn’t new, things began to escalate fast in Q1 of 2025.
US President Donald Trump re-entered the conversation with bold moves. On April 3rd, the White House dropped a tariff bombshell: China’s tariffs were being raised to a jaw-dropping 125%. Suddenly, a massive chunk of goods coming from China would become significantly more expensive to import into the US.
What does a 125% tariff mean?
A tariff is basically a tax on imports. So, when the US slaps a 125% tariff on Chinese goods, it’s making Chinese products a lot more expensive for American businesses and consumers.
If a company buys $100 worth of goods from China, they now have to pay an extra $125 just to bring them into the US. That’s $225 total. Yikes. That cost gets passed down the line—to distributors, to retailers, and eventually to you when you’re buying a laptop or a toy.
What kinds of products are affected?
- Electronics (phones, laptops, smart devices)
- Appliances
- Toys
- Automobile parts
- Industrial components
90-Day Truce & 10% Reciprocal Tariff
In an unexpected twist, Trump announced a 90-day pause on new tariffs. This move created what was dubbed a “window for negotiation.”
This US-China Trade War in Logistics goes on, while other countries seeking trade deals with the US get their tariffs capped at just 10%. That’s a massive discount compared to the 125% whammy dropped on China.
The reciprocal tariff policy pushed several countries, like Taiwan, Vietnam, Israel, and Cambodia, to the negotiation table. In return, they offered to drop their own tariffs on US goods.
Also Read, Trump Nominates Sean Duffy To Lead $110 Billion Transportation Department
Impact on Trucking & Warehousing
Let’s talk boots on the ground: trucking and warehouses.
With the sudden cost jump on Asian imports, there’s been a noticeable surge in pre-tariff shipments. In January and February, many companies rushed to get goods into the US before the tariffs hit. This led to:
- Overbooked trucking routes
- Temporary warehouse overflows
- Delays in unloading ports
The Rise of Mexico: Nearshoring Gets Real
One major winner from this US-China Tariff War is Mexico. The idea of nearshoring, shifting manufacturing from distant countries like China to geographically closer, politically safer ones like Mexico, is no longer just a boardroom theory.
Why Mexico?
- Same time zones, so easy communication
- Shared border with the US
- Favorable USMCA trade agreement
- Cultural alignment and workforce availability
Tariffs, Technology & The Global Supply Web
From semiconductors to tiny internal screws, Asia is the heart of tech manufacturing. This is what makes the shift so hard and slow. But with trade deals in motion and governments incentivizing regional manufacturing, we might slowly see a new world map of production emerge.
The 125% Tariff on China: Supply Chain Aftershocks Incoming
Trump’s move to slam China with a 125% tariff is no joke. But this forces U.S. companies to either absorb massive costs, pass them to customers, or move production elsewhere.
Predicted Supply Chain Fallout
1. China Becomes “Plan Z”: For U.S. importers, China will now be a last resort. Even though China still makes the majority of electronics, toys, machinery, etc., many brands will finally accelerate plans to shift out. Anticipate an increase in manufacturing orders from Mexico, Vietnam, and even India.
2. Explosive Growth for Nearshoring in Mexico: With faster delivery, fewer geopolitical risks, and lower tariffs, nearshoring to Mexico is now a permanent move, not a trend. Companies like Nintendo, auto parts suppliers, and electronics manufacturers are already shifting operations there.
3. Rise of “Transshipment” Tactics: Some shady moves will surface. Expect more businesses to ship Chinese goods to other countries like Vietnam or Malaysia first, repackage or modify them, and then reroute to the U.S. to bypass direct Chinese origin labeling. Customs will likely crack down harder with inspections and origin verifications, slowing port clearance times.
4. Freight Rate Volatility: Ocean freight from Asia will be a wild roller coaster. If demand drops sharply from China, freight prices could dip, but if rerouting drives congestion in alternate ports (Vietnam, Mexico), we could also see rate spikes there instead.
5. Increased Costs for Consumer Goods: American consumers may not see it right away, but by Q3 and Q4, we’ll start feeling the pinch. Phones, furniture, toys, appliances—many of which rely on Chinese parts—may cost significantly more. Retailers might start subtly shrinking package sizes or raising prices to cover the costs.
6. Tech Sector Takes a Hit: U.S. tech giants like Apple, Dell, and Tesla, who rely on Chinese manufacturing, are now in scramble mode. Shifting these deeply rooted operations isn’t fast. We might see production delays or even product shortages if the tariff shock isn’t managed well.
Also Read, Procurement vs Supply Chain: 4 Key Points You Must Know
What Might Happen Next: The 90-Day Truce and 10% Tariff Window
Trump hit pause on the heavy tariffs and introduced a 10% “Reciprocal Tariff” window. This gives countries a chance to negotiate new trade deals with the U.S. under more favorable terms, instead of risking higher fees later.
Predictions for Supply Chain in These 90 Days
1. Surge in Imports Before the Clock Runs Out:
Importers will rush to bring in goods while tariffs are lower, especially from countries that haven’t been hit with the 125% China tax. Ports like LA, Long Beach, and Savannah might see a mini-spike in incoming containers.
2. Temporary Drop in Consumer Prices:
With import costs dipping temporarily, some products might get small discounts, mostly in electronics, apparel, and general merchandise. Retailers like Walmart and Target might stock up now to avoid cost spikes later.
3. Trade Negotiations Will Go Wild:
Countries like Vietnam, Cambodia, Israel, and Mexico are trying to strike quick deals. Expect a flurry of last-minute negotiations, either to finalize agreements or to get them extended beyond the 90 days.
4. Logistics Networks Will Shift Fast
Freight forwarders, trucking companies, and warehouse managers will need to adjust their plans quickly. There’s going to be more cross-border movement and inventory reshuffling to take advantage of the lowered fees.
5. Uncertainty Will Freeze Some Decisions:
Some businesses will hit pause on long-term commitments, waiting to see if this truce becomes permanent or if tariffs jump again. That means delayed investments, conservative shipping, and a focus on flexibility.
Final Thoughts: What’s the Supply Chain Mentality Right Now?
The global supply chain is playing defense amid the U.S.-China tariff War. Everyone’s hedging, repositioning inventory, and renegotiating supply contracts. The U.S. is trying to realign trade in its favor using extreme pressure. China’s role will diminish as companies look elsewhere, but it won’t disappear overnight.
The big question is: Are we entering a post-China supply chain era?
Maybe not entirely. But we may be entering a time where businesses can’t afford to depend on just one country.
Also Read, Maersk Survey: Supply Chain Visibility Leads, AI Ranks Lowest
At Lading Logistics, we help businesses handle the same supply chain challenges, like changing suppliers, adjusting freight plans, and staying flexible when things shift. If any of this sounds familiar to what you’re dealing with, feel free to reach out. We’re always open to a conversation.
Sources for the article:
Trump’s Wide-Ranging Tariffs Could Complicate Supply Chains
Navigating 2025: Trends And Risks Impacting Nearshoring In Mexico
Donald Trump raises tariffs on China to 125%
iPhones, Shein and toys among top-traded items potentially impacted by US-China tariff war
