As published by Rick Andrade at CEO World Magazine
Have you seen it, the vastly vacant U.S. ports of entry on the West Coast as trade with China and other Asian nations grinds to a skidding halt like a derailed locomotive?
According to Gene Seroka, Port of Los Angeles executive director, China shipments in May will be down again between 25% to 30% for all west coast ports since Trump’s sweeping tariff declarations last month.
On April 2nd 2025, in a White House Rose Garden ceremony, President Trump announced America’s Day of Liberation: A massive across-the-board tariff scheme that “will forever be remembered as the day American industry was reborn,” the president said. And reborn it was, but not the way he intended.
In the past few weeks, the escalating U.S.-China trade war has put the brakes on trade.
America imported $462 billion in products from China, 13% of our total imports in 2024, and carries a huge $295 billion trade imbalance built up over decades of U.S. manufacturing outsourcing.
After President Trump first announced the 145% tariff on Chinese imports, and China responded with a 125% tariff on American imports, the stakes and risks of economic catastrophe scared the daylights out of most U.S. importers who immediately shouted foul play.
As a result, Trump sent Treasury Secretary Scott Bessent to meet with high-level trade reps from China in Geneva recently and offered to lower U.S. tariffs from 145% to just 30%; a welcomed development.
China in turn dropped its tariffs to 10% and removed its export restrictions of vital Rare Earth Elements in a sign of détente, at least for 90 days. So how is it all playing out?
Back here at home, I call the move a shot across the bow for U.S. importers; a warning that despite the 90-day hiatus should compel CEOs and business owners who rely on China to take counter measures, and fast.
What was C+1 (China plus one other supplier) is now C+2 or C+3, says former World Bank President Dr. Mohamed El-Erian, President of Queens’ College, Cambridge about the tariff wars.
“CEOs [who source from China] are just waiting. They don’t want to make any major decision that has longer term consequences,” he warns. And who wants to import anything if the tariff fee at U.S. ports of entry can substantially flip up or down on any given day?
In 1930 no fewer than 1,000 economists warned then President Hoover not to enact the Smoot-Hawley Tariff Act to protect nascent American industries. Tariffs don’t work they argued. But he did it anyway, and the results triggered a global trade war against the U.S. which then saw a 66% decline in imports and exports over the next 2 years exacerbating and deepening the burdensome toll of the Great Depression. FDR quickly reversed the tariffs in 1932.
Still. Ninety-five years after Smoot-Hawley, much the same is happening today. As it turns out of all our global trading partners, America’s reliance on #1 China has since become a vital resource to millions of Americans who like inexpensive products.
Did you know 80% of U.S. toys imported are made in China? Did you know that 30% of U.S. apparel and nearly all game consoles, PCs, laptops, smartphones and batteries we buy are made there?
This means that by August 2025 (90 days from now), without more concrete and definitive trade agreements with China, thousands of small and medium-sized U.S. businesses that rely on China for products and supplies to earn a living and pay wages will face layoffs, price increases or worse – extinction.
So what should you do about it?
Attempts to stave off the tariff Sword of Damocles are in fact well underway. Suzanne Clark, President of the U.S. Chamber of Commerce, penned an urgent letter to Trump’s tariff trade team recently begging for injunctive relief. This likely compelled Trump to sit upright and take note.
In the letter she warns with each passing day U.S. small businesses face unsustainably “higher costs and interrupted supply chains that will cause irreparable harm” if nothing is done.
She seeks an immediate written carve-out exemption for all small business importers before it’s too late. And I completely agree.
Trump must not let the sword of death fall upon small businesses in 90 days, in a one-shot attempt to rebalance trade with China.
And he must not further kick the can down the road, as he has repeatedly done with the TikTok social media platform, officially banned in the U.S. by Congress months ago. This management style only creates investment uncertainty and market chaos – both bad for business – and the president should know better.
So I too sent a letter advocating for a fixed 1-year tariff pause or exemption window to give vulnerable U.S. businesses a fighting chance to scrounge up new suppliers, C+3. It’s the only way, in my view, to save small businesses short of eliminating tariffs altogether.
At the same time, to cushion the blow many small companies that are able to absorb the 30% tariff are advancing their inventory purchases from China during the 90-day tariff window to desperately try to preserve sales and profits for the upcoming 2025 holiday season.
However, as it stands despite China and Trump indicating a willingness to negotiate a longer-term more permanent reduction to the existing tariff schemes, post-Christmas the party is over.
After 50+ changes to tariff policy in the last 100 days, there’s a growing sense the level of uncertainty in the corner office will only grow worse under Trump. And it’s time to play defense.
Here’s the plan:
- Get your goods on shore asap: Verify Transit Status: Confirm with your shipping broker and freight forwarder that your goods are or will be loaded at least 30-days before arriving in the U.S., and will arrive at the Port of Los Angeles/Long Beach, Oakland or Seattle no later than July 30th 2025 to avoid the deadline rush. Be sure to double check Certificates of Origin and Bills of Lading documents to prove country of origin, value and sign-off dates. Keep in mind shipping rates may be higher as a rush of new orders refills vessel capacity.
- Accelerate Delivery: If arrival is scheduled close to or after July 30, work with your logistics provider to change carriers to expedite shipping, potentially rerouting cargo to faster vessels or prioritized loading. Contact your freight forwarder to explore all your options.
- Explore Bonded Warehouses: If goods cannot arrive before July 30th, consider redirecting them to a U.S. bonded warehouse, bypassing U.S. Customs, where they can be stored without immediate tariff payment until you can identify better tariff options.
Meanwhile, cover your flanks:
- Advocate for Exemptions: Partner with trade groups like the Consumer Brands Association for consumer-packaged goods, which successfully lobbied for exemptions. Or contact the National Association of Manufacturers (NAM) to join advocacy efforts for fair trade.
- Demonstrate Economic Harm: Compile data showing how tariffs threaten sales, profits, jobs and supply chains. Raising prices to offset a 145% or 30% tariff is not a reliable competitive strategy, and will result in economic loss or bankruptcy. Make the case.
- Leverage Political Connections: Reach out to local news-makers, law-makers or Trump trade-team members directly, like Commerce Secretary Howard Lutnick via public channels. And sign on to the U.S. Chamber of Commerce’s efforts to call on the president for immediate tariff relief.
Now is also the time to review your business model, pricing, customer loyalty and sales channels. This is what I meant by heeding the warning shot across the bow. For small businesses that rely on Chinese products and supplies, 30% tariffs may be the new norm. If that makes your products un-competitive look for alternative sources, like Made in America.
If you can’t find cost-effective suppliers here on American soil, just follow your manufacturer. Many Chinese producers are setting up shop outside China to avoid high tariffs.
- Build Strategic Alliances: Partner with competitors or suppliers to share tariff-related costs, such as joint volume purchasing from non-Chinese markets.
- Mitigate Chinese Supplier Dependency: This means to embrace the USMCA agreement with duty free products from Canada and Mexico if at all possible. Or if cheaper products are super important to your customers, expand your import horizons to lower-tariff “friend-shoring” countries like India (27%), Thailand (7.5%) and Malaysia (6.1%) among others. We all know that shifting long entrenched supply chains is not easy. That’s where the U.S. Chamber of Commerce (ITA) can assist you in finding and vetting new suppliers. Call them.
Finally, listen up! These crazy ever-changing tariffs on goods from China are more than a mere nuisance. They could be the new norm.
So stock up now or find new lower-cost suppliers in places like Mexico or India. And better still, don’t overlook Made in America options. Many Americans will pay more for them. After all, that’s the key point Trump is trying to make. But either way, if you don’t prepare before August 2025, you could face skyrocketing import prices, which could easily put you out of business for good.
So what are you going to do?
You’re going to get your goods in, push for exemptions, and start looking beyond China for answers! That’s my “do it now” advice.
Make sense?
Rick