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The global trade landscape has entered a new phase of volatility, with escalating tariffs between the United States and China further straining supply chains. Today, China raised its tariffs on U.S. imports to 125%, dismissing President Trump’s tariff strategy as “a joke,” according to Reuters. Pamela Coke-Hamilton, Executive Director of the International Trade Centre, warned that the continued escalation “will result in an 80% reduction in trade between the countries,” with potentially catastrophic ripple effects for the global economy.

Although the U.S. announced a 90-day pause on tariffs for several countries, it simultaneously raised duties on Chinese goods to an effective rate of 145%. As The Loadstar reported, “Yesterday, the understanding was that the US had imposed 125% tariffs on imports from China, however it has now been said that this is actually 145%, as the 125% was in addition to the previously introduced ‘fentanyl tariff’ of 20%.” The administration had initially failed to include the earlier levy, compounding confusion and sending markets into turmoil.

The immediate outlook is grim: “There is no doubt, however, that volumes will take a dive,” warned Ben Hackett, founder of Hackett Associates and co-author of the Port Tracker published by the National Retail Federation. “At present we expect to see imports begin to decline by May, and that they will drop dramatically during the remainder of the year.”

Marie-Christine Lombard, CEO of Geodis, highlighted to the Loadstar that the operational strain on logistics providers: “We are constantly on the lookout, using dedicated IT systems to ensure that we are clearing goods at the going rate at any particular time,” she said. “But it’s the constant changing of the rules of the game that’s worrisome – business doesn’t like uncertainty.” “I think it’s still too early to draw any conclusions, but it’s the unpredictability of it all that really bothers me, because it’s not good for investment nor for consumption,” she added.

Further complicating matters is the growing issue of “tariff stacking,” in which multiple unrelated duties are applied simultaneously to a single shipment. And overarching it all is the blanket 10% tariff on “anything from anywhere,” unless the product is steel or aluminium—or originates from certain countries like Canada or Mexico, in which case the rate climbs to 25%.  As governments and businesses seek to adapt, uncertainty is fast becoming the only constant in global trade.

For shippers alternative sourcing strategies for China – like Vietnam or Cambodia – are also under threat of high tariffs, which also threatens to undermine the ‘China-plus-one’ strategy of procurement.