IN THE NEWS: Trump China Trade Deal—Tariff Pause Means New Surge in Freight Shipments, and Higher Prices

CNBC
May 12, 2025
Lori Ann LaRocco

FROM THE ARTICLE: Retailers, especially small businesses, say the US-China pause in tariffs is welcome, but consumers should expect higher prices are here to stay.

Another surge in trade from China to the US should be getting underway, according to retailers and logistics executives, as the initial trade deal struck by the US and China leads importers to move forward with shipments during the 90-day pause on the steepest tariffs implemented by President Donald Trump.

On Monday, the US and Chinese governments announced a trade deal, though the details of the US-China pact are still sketchy. But in the short term the most important aspect of the agreement is the suspension of the so-called reciprocal tariffs, though broad-based 10% duties will remain in effect, as well as a 20% tariff related to fentanyl.

“I have clients with thousands of containers pre-loaded in China that are ready to come in,” said Paul Brashier, Vice President of Global Supply Chain at ITS Logistics. Over the next four to six weeks, he expects a surge of containers, calling the 90-day pause “the pivotal moment for supply chain planning out of China.”

There is still lingering frustration with the Trump administration for a trade policy that has whipsawed and already cost their businesses. Reduced tariffs on Chinese goods at 30% will also come amid expectations of rising costs in the supply chain as more companies look to frontload orders again. With the typical gross margin for consumer products companies in the range of 40-50%, a 30% tariff is difficult to work into many business models.

“This will kick off peak season and run hard until the third quarter,” said Brashier. “There are a lot of construction and manufacturing projects slated for 2026, and these companies have deadlines to hit, and the projects are being staged for breaking ground in early 2026.”

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