Summary:
- Since Donald Trump took office in Jan. 2025, there has been a 145% increase on imports from China, met with an 125% tariff on U.S. imports to China. This does have some exceptions, including electronics.
- Imports from China to the U.S. have been higher compared to last year, possibly illustrating pull forward inventory, but have fallen for two consecutive weeks compared to last year when the 125% tariff passed.
- Exports from the U.S. to China have been decreasing by as much as 30% since Donald Trump has taken office. This trend may be levelling out according to the most recent data.
- Blank sailings from China have increased by 100% to the U.S. East Coast and 31% to the U.S. West Coast since new tariffs have begun in early February.
Overview
On April 9th, former President Donald Trump postponed nearly all the “Liberation Day” tariffs, except for the 10% baseline tariff and the highest rate on the list—China. As of April 9th, Chinese imports to the U.S. are subject to a 125% tariff. This is in addition to the 20% tariffs implemented earlier this year, bringing the total tariff on Chinese goods to 145%. This means a product that previously cost a U.S. company $100 to import now costs $245.
The Trump Administration did make an exception for electronics imported from China, which does make up about 25% of all Chinese imports. These are not included in the additional 125% tariff, but it has been stated that there will be additional tariffs down the line of this industry.
In retaliation, China has imposed a 125% tariff on U.S. imports, significantly increasing the cost for U.S. suppliers competing in the Chinese market.
U.S. imports and exports from China
Imports
When tariffs increase, U.S. companies often look to diversify their sourcing options. Over the years, many businesses have reduced their dependency on China, a trend accelerated by the COVID-19 pandemic and resulting supply chain disruptions. The chart below compares recent weeks of imports from China to the U.S. with the same period last year.
As the chart shows, imports from China have remained stable up until last week, indicating that, for now, U.S. companies have not significantly altered their ordering strategies, but could be pulling forward orders. However, with the recent 145% tariff hike, companies that are already positioned to pivot their sourcing strategies appear to be slowing down imports from China. The week of 4/14 marks the second consecutive week in a decline of imports from China. Industries with more competitive global options will likely see a downward trend in orders from China going forward.
Exports
In response to the U.S. tariffs, China has imposed its own tariffs on U.S. imports. The chart below shows changes in U.S. exports to China so far this year compared to the same time last year.
Unlike imports, U.S. exports to China have decreased, suggesting that China has more flexibility in adjusting its sourcing strategies to avoid U.S. goods. With the new 145% tariff on U.S. imports, this decline in exports is expected to continue.
Blank Sailings
As the tariffs increase and exports decrease out of China, vessels that travel from China to the United States are starting to see an increase of blank sailings, which is when a carrier chooses to skip port calls along a trade route.
The chart above shows how many blank sailings are scheduled to occur through May 2025 on vessels originating from China for both the East and West coast of the United States. The East Coast is set to see a peak of 24 blank sailings in the last week of May, a 100% increase since new tariffs began in February, with the West Coast close behind at 21, or a 31% increase.
While there are numerous reasons carriers might choose to leverage blank sailings, the reason behind doing so now is likely driven by the lower demand and therefore higher capacity on vessels among these routes. What it means for shippers is that ports that they generally utilize for their shipments might be skipped, so drayage moves will have to shift to a new port of discharge. This can cause struggles and increased costs for shippers if they do not already have contracted dray rates for the new port of discharge, as now they are subject to the spot market and must make accommodations quickly or be subject to demurrage fees from the ports.
Most impacted industries
Consumer Electronics
Consumer electronics, including smartphones, computers, and other tech products, are heavily reliant on Chinese manufacturing. These products are difficult to source from alternative countries without substantial increases in cost and lead time. While exempt from the additional 125% tariffs, the threat of future tariffs and increased prices for U.S. consumers and may incentivize manufacturers to relocate production to countries with lower tariff rates or lower labor costs.
Textiles and Apparel
China is a major supplier of textiles and apparel to the U.S. and produces a wide range of goods that are difficult to manufacture elsewhere due to cost advantages in labor. With tariffs increasing on these goods, U.S. businesses in this sector—especially those with low-profit margins—will feel significant strain. Companies that rely on Chinese imports to maintain affordable pricing will need to either find alternate sourcing solutions or absorb the costs, potentially impacting their bottom line.
Agricultural Products
Agricultural products like soybeans, pork, and beef are a significant part of U.S. exports to China. With the new 145% tariff, it is expected that China will reduce its imports of these products, negatively impacting U.S. farmers and exporters. These industries are already operating on relatively low profit margins, and the additional cost burdens from tariffs may further strain their profitability.
Chemicals and Pharmaceuticals
The chemical and pharmaceutical industries are also vulnerable to tariff increases, particularly those that depend on active pharmaceutical ingredients (APIs) manufactured in China. These products have limited alternative sources, meaning that any significant tariff increase could disrupt U.S. production. Similarly, the retaliatory tariffs on medical equipment and pharmaceutical exports from the U.S. will affect the U.S. pharma industry’s ability to compete in the Chinese market.
Summary
The recent tariff changes, particularly the 145% tariff on Chinese imports to the U.S. and the retaliatory 125% tariff from China, will have significant implications for both imports and exports between the two countries. U.S. companies that rely heavily on Chinese manufacturing may face increased costs and will likely begin exploring alternative sourcing options. Conversely, U.S. exports to China will be hindered by the new tariffs, making it more challenging for U.S. suppliers to compete in the Chinese market.
Industries most impacted include consumer electronics, automotive, textiles, agriculture, chemicals, pharmaceuticals, and luxury goods—particularly those with low-profit margins or those dependent on exclusive manufacturing in China or the U.S. As companies adjust their strategies to mitigate the effects of these tariffs, we can expect further shifts in global supply chains, with potential long-term changes to how the U.S. and China engage in trade.
