How Will US-China Tariffs Affect Global Supply Chains?

Editor’s note, April 2026: The tariff environment underpinning this article has changed materially. The Supreme Court struck down the IEEPA-based tariffs in February 2026, and the White House responded within days with a new legal mechanism. If you’re making sourcing or logistics decisions based on this piece, read the update below before you do anything else.

The tariff landscape has shifted significantly since this blog was published, here is a summary of what you need to know:

2026 Update: Where US-China Tariffs Stand Today

• On February 20, 2026, the Supreme Court ruled 6-3 that Trump’s broad “reciprocal” tariffs — which hit Chinese goods at up to 125% — were illegal under IEEPA. All IEEPA-based tariffs terminated at midnight on February 24, 2026.

• Within days, the administration invoked Section 122 of the Trade Act of 1974, replacing them with a 10% universal baseline tariff — legally capped at 15% and set to expire July 24, 2026 unless Congress extends it.

• For China specifically, the Section 301 tariffs (25%) imposed prior to the SCOTUS ruling remain fully intact, bringing the total effective rate on most Chinese goods to approximately 35%. Sectors like EVs, semiconductors, and solar remain at up to 100%.

• What this means for your business: With Section 122 expiring in July and new Section 301 investigations now underway covering China and 14 other trade partners, costs remain elevated and the rules of the road could change again quickly. Having a flexible 4PL partner to reroute sourcing and freight isn’t optional — it’s the strategy.

Let’s take a look at the likely outcomes of a Trump trade war, who is and will be affected, and how should we be battening down our logistics to prepare.

Read about Wayfindr’s Logistics Management Services

Market & supply chain effects of really high tariffs 

Growth slows

Were Trump to push for a full-on trade war, trade GDP growth is going to be much lower. 

USD 135 billion of goods will be at risk under those tariffs. That’s assuming that 25% tariffs on imports will be the worst of it. If we’re talking about the worst case at 60% and 10 % rest of the world, the effects would be extreme. As much as a third of global GDP growth could be lost.

Given a full trade war, we would initially see higher rates in the US due to higher inflation expectations, followed by a slowdown in the economy. EU growth would begin to suffer, and their economy would slow down. 

Freight rates zigzag

Back in 2018, trump’s announcing tariff increases caused a number of shippers to push forward ocean imports. Once the tariffs are announced, the same thing will happen, creating a rush in shipping demand.

In 2025, we’re likely to see container rates climb quickly ahead of tariff implementation. Tariff pressure is only one part of the story. The physical shipping routes carrying those containers are also being disrupted, with vessels rerouting away from the Suez Canal and the Straight of Hormuz (2026 update)and delays stacking up across key corridors. Here’s how the world’s major trade routes are shifting in 2025 and why that matters for your freight planning alongside such current disruptions..

After freight rates’ preliminary climb, they will likely fall quickly once tariffs are in place. Tariffs will slow trade, port congestion will die out, and freight demand will fall. Freight prices will get lower and lower, and shipping providers will likely struggle due to decreased capacity.

Related Reading: Logistics Risk Management and How to Prepare

Manufacturing moves

Already, we are seeing various brands trying to restructure their supply chains to avoid future US-China tariffs. For US companies, that means trying to re-shore manufacturing to places like Mexico and Vietnam. This is also knows as the China+1 strategy.

The logistics issue is that the manufacturing capabilities, logistics networks, and infrastructure of these places are totally different from those of China. Vietnam has been a manufacturing hub for some time now, but its capacity is about 10% of China’s, and its manufacturing sector is not quite as well developed.

Chinese brands disappear from the US market

Temu and Shein are famously reliant on favorable US-China trade tariff laws, using the De minimus loophole to sell cheap goods to Americans and still make a profit.

If a trade war begins, certain Chinese brands that millions of people in the US use every day may suddenly disappear. These effects will be felt by those who use said brands to buy everyday goods like apparel and toys at affordable prices.

It’s unlikely they will be able to find such cheap prices from US-manufactured brands, and those effects will be felt – particularly by those who are already struggling in an economy burdened with low growth rates and rising inflation.

The key to supply chain uncertainty? Figure out your contingency plan

At the moment, there is a lot of uncertainty about what will happen when it comes to US-China tariffs war. While you can’t predict what will happen with markets and supply chains, you can work to create plans that account for likely scenarios and help protect your brand in tough times.

Plus, you can work with an experienced logistics partner, because that’s what we do best. As your 4PL, we set up and manage your logistics across your entire supply chain processes, but that’s not all. 

Wayfindr pride ourselves on helping our e-commerce partners in uncertain times, whether that be planning for future possibilities by relocating certain operations through our extensive network, or quickly fixing an issue after a supply chain breakdown happens.

If you don’t enjoy following the news and trying to guess how you should manage your logistics in times of uncertainty, we’re here to help. Get in touch today for a totally free logistics consultation on how we can make your supply chain ready for anything in the new year.