10% China tariffs and the supply chain scramble

The tariffs will come as importers ramp up shipments for peak season, creating the potential to disrupt global supply chains and trade flows for the remainder of the year.

The 10% tariffs announced Thursday in a four-part series of presidential tweets sent U.S. importers into what Sue Welch described as a “scramble.”

“It’s really hard to plan for crazy,” Welch, the CEO of Bamboo Rose, told Supply Chain Dive. “And this is crazy.”

The 10% tariffs are on $300 billion worth of goods from China, also known as list four.

The announcement was not altogether out of the blue, given that such tariffs on this fourth list had been threatened before and gone through a public comment period and hearings. But the timing of the announcement was largely viewed as unexpected, after just one round of U.S.-China trade negotiations concluded.

“The swiftness with which it escalated I think is a little bit surprising,” Shehrina Kamal, product director of risk monitoring at DHL Resilience360, told Supply Chain Dive. “Now it does put in jeopardy the trade discussion that had been slated for September.”

The tariffs will also come at the start of the fourth quarter and near the beginning of peak season, creating the potential to disrupt global supply chains and trade flows for the remainder of the year.

What’s the impact of 10%?

Economic and trade impact analyses from earlier this year centered around the threat of 25% tariffs on list four goods. Some estimates predicted a 1.1% shrink in U.S. GDP with 25% tariffs on $550 billion of Chinese imports (all four lists combined), plus China’s retaliatory tariffs, in place.

While 10% may seem like a drop in the bucket compared to 25%, consultants and analysts told Supply Chain Dive the impact will still be significant, in part due to the wide range of products covered in list four.

Manufacturing sectors are particularly affected by the list four tariffs, Kamal said. In the fourth tranche, 437 product items are metals, 303 are machinery and 133 are chemicals. These three categories together amount to $77.7 billion in imports, according to Resilience360.

When tariffs impact operations and the bottom line in manufacturing, such effects ripple further down the supply chain. Chemicals listed for tariffs in the fourth round are used in the production of food products, beverages, pharmaceutical, personal care items and more.

The tranche four tariffs also garnered significant attention due to the myriad consumer products on the list, and the expectation that brands and retailers would have no choice but to push price hikes to consumers. The list includes apparel and footwear along with several types of consumer electronics.

“These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods,” David French, senior vice president for government relations at the National Retail Federation, said in a statement after Trump announced the 10% tariffs.