Shortly after President Donald Trump announced earlier this week that the United States would implement 25% tariffs on U.S.-bound imports from Canada and Mexico that hit the economy on February 1, he subsequently said the nation would also face a 10% tariff. would raise on the USA. bound imports from China.
A Reuters report found that the impetus for China's tariffs is due to fentanyl being sent from China to the United States via Mexico and Canada.
As in Lmin posts made on its Truth social platform in late November, as well as an additional 10% tariff on all US-bound imports from China.
Earlier this week, Trump directed federal agencies to study trade relationships with China, Canada and Mexico, the three largest U.S. trading partners.
In a memo issued Jan. 21 to various federal government and Cabinet officials focused on America's first trade policy, including: the Secretaries of State, Treasury, Defense, Commerce, Homeland Security, Director of the Office of Management and Budget The United States Trade Representative, Assistant to the President for Economic Policy, and Senior Adviser on Trade and Manufacturing told Trump that his administration pursued trade and economic policies in 2017 that benefited the American economy, the American worker and national security put in the first place.
“This resulted in an American revitalization characterized by robust supply chains, massive economic growth, historically low inflation, significant increases in real wages and household wealth, and a path to eliminating destructive trade deficits,” the memo said.
While details on tariffs are still available, these planned tariffs will be driven in part by the movement of Chinese goods through Mexico to the US
“I think we're going to see a lot more policies focused on these rivers. That would probably be an expectation of the new administration coming into a sharper perspective,” he said. “We not only have tariffs with countries directly, particularly Mexico and Canada, and perhaps there are some USMCA considerations regarding 2018 China and the ripple effects of that. Or do you have Chinese goods gone and are there workarounds on the market to avoid the tariffs that have been placed on these goods. I think what we're seeing in some of the policies directed at Mexico is part of the focus is that the Chinese goods weren't just funneled through Mexico and into the United States. “
While China's reported tariffs are below what was previously touted, Suppyframe CMO Richard Barnett said a 10% U.S. tariff on Chinese imports would still increase the pricing of electronic components and have a disruptive impact on the country's entire supply chain Have electronics.
“Consider the printed circuit board used in almost anything that has a connector. The hypergrowth of the AI data center segment depends on high-layer PCBs, and China represents over a third of total production,” Barnett said. “Chinese companies also enjoy around 60% market share for other advanced PCBs used in AI, servers and countless end markets. While AI is getting all the attention, global and defense demand for PCBs is growing significantly and sourcing of the electronic components in the space is in China-zero-verse China-plus-one modes. “
In a recent interview, S&P Global Market Intelligence Research Director Chris Rogers, reflecting on the first quarter, said Rogers is the top topic for supply chain decision-makers and the main reason why year-over-year growth is expected above the board in the fourth quarter, adding that S&P Global Market Intelligence expects overall U.S. imports to decline overall in 2025.
“The first quarter appears to be strong, but things could slow quickly as the year progresses, with the fourth quarter potentially down 10% to 12% as the impact of tariffs begins to feel both felt “We feel a reduction in overall trading, but also a reduction to a strong fourth quarter the year before,” he said.
On a more positive note, he explained that this is not the first time that shippers have, in a sense, prepared for the unexpected, as things were similar in 2018 when tariffs in China were initially put in place by the Trump administration.
“There will probably be some front loading and probably more increasing prices than last time,” he said. “Perhaps the difference this time is that tariffs could be much more widespread. If tariffs are widespread, there's no point in doing anything other than just raising your prices, because it doesn't matter where you go, you'll still face higher tariffs if you don't bring everything into the US bring back. But if it was cheap to bring everything back to the US, they would have already done so. Tariffs are really the game in town. “
