Trump backed down on China tariffs. Experts say it’s too little, too late.

Earlier this year, Americans were facing the prospect of significant disruption to supplies of imported products they use and consume every day, brought on by President Donald Trump’s tariffs.

Now that the president has stepped back from the brink and lowered his tariff rates on goods imported from China to 30% for shipping containers and 54% for shipments worth less than $800, some of that chaos has temporarily subsided. The tariff rates had previously been set at 145%, or even 245% for some products. 

The White House said it calculated those previous rates by combining a 125% “reciprocal” tariff, a 20% tariff “to address the fentanyl crisis,” and additional product-specific tariffs. China struck back with a 125% tariff on American goods, which it has now lowered to 10%. Both the United States’ and China’s lower tariff rates will last for 90 days; the White House announced the agreement with China on May 12.

But the nation is still facing much more troubling economic circumstances than it was prior to Trump’s “Liberation Day” announcement on April 2, especially since shipments from China slowed down to a trickle for weeks. CNN reported that on the morning of May 9, zero ships left China for ports in Southern California, something that hadn’t happened since the height of the COVID-19 pandemic shutdowns.

“Many of the goods that had been produced that were just waiting to depart, those will now depart. No, it may not be 100% of all of them, because 30% tariffs are still very substantial, but the vast majority of that stuff should come over or should start to process,” said Jason Miller, a professor of supply chain management at Michigan State University. “So take as an example a lot of Christmas-related items, you know, toys, festive decorations and things like that, you will see a good share of those orders now get reinstated, but it won’t be all of them, because, again, a 30% tariff is still substantial.”

Because of that 30% tariff, importers are going to be very strategic about what items they bring in moving forward, which could result in less variety, Miller said.

“They’re going to be bringing in their bestsellers that they know that they can essentially offload even at a little bit of a higher price,” he said. “But probably more than anything, they’re going to try to prioritize bringing in the goods that can be produced more rapidly. So what that may mean is, rather than five colors of something, I have one color of it produced, that way it’s a simplified process, and I can just get it here.”

Miller underscored that most consumers still haven’t seen the effects of the 145% tariffs that were previously in place, and certainly not the effects of the new 30% rates.

“The stuff that we’re talking about getting hit with the bigger tariffs, that wasn’t what was sold in April. That stuff’s not hitting the shelf till this month or June or July,” he said.

Miller said he’s also still skeptical of the Trump administration’s original stated impetus for the tariffs, which was to bring back manufacturing jobs.

“I mean, when the commerce secretary said we’ll have millions of people screwing together iPhones, I thought to myself, ‘No, we won’t.’ Who wants to work those jobs? No, no one in their right mind wants to work those jobs,” he said. 

The nostalgia for the manufacturing jobs that were the bedrock of the American economy decades ago is ultimately not based in reality, he said.

“I think what people want is, they want stability. And there’s this perception that the economy was much more stable when it was more manufacturing-intensive in the ‘50s and ‘60s,” he said. “But what that misses are two key factors of, one, we had much stronger unionization back then. But then, two, and perhaps even more importantly, the rest of the world was kind of still a smoking ember from the Second World War. We were the only game in town. It’s not coincidental that it’s the 1970s, 25 years-plus after World War II, that we start facing legit, strong competition from Japan and West Germany. They had fully rebuilt and recovered.”

Another professor of supply chain management, Rudolf Leuschner of Rutgers Business School, said the Trump administration appears to have timed this tariff adjustment to avoid the worst of the previously predicted uncertainty, shortages and price increases during the upcoming shopping seasons.

“This lowering in this 90-day phase, I think, has been done in a way very strategically, because this would be about the time when we start thinking about the back-to-school and holiday seasons, and that’s when you would want to start scheduling orders from your overseas suppliers, especially from China, to start rolling in and you’re filling up your inventory,” Leuschner said. “I think without this relief, the fall purchase season, if you will, would have been a lot more difficult. This rate right now allows companies to replenish. Yes, there still is a tariff, but it’s, I guess, a quarter of what it was before. So that’s going to make a big difference. It’s not zero, so we have to acknowledge that. But now is the time when we start — maybe in June, July, August is really when we start seeing shipments coming in to replenish our fall season buying, so it’s very timely.”

Leuschner also said it’s unlikely there will be a supply chain bottleneck like the one seen in the aftermath of the COVID-19 pandemic shutdowns because of the nature of this particular brand of chaos.

“A lot of these moves have been pre-announced, and this was one of those contingencies that, OK, maybe there will be a pause and a reduction. Bottlenecks usually happen when nobody could plan for things to happen, and that’s not right now,” Leuschner said. “Now, is it fun? No. Is it going to be a crisis? No. Our supply chains, especially since the pandemic, have become more resilient, and that makes a huge difference as well.”

Where consumers can still expect to see more noticeable inflationary effects, Leuschner said, is in the lowest-cost item categories.

“Higher-value supply chains tend to have higher margins, and most of the time, all the companies along the supply chain will be able to absorb some of those tariffs fairly easily. The rub is in lower-value products or product supply chains with very thin margins,” he said.

Ultimately, Americans will just have to wait and see how things play out — a position few people like to find themselves in, Leuschner said.

“A lot will depend on what will happen for the next 90 days,” he said. “I’m starting to get the sense that people kind of want to come up with declaring victory, whatever victory means, and we move on, and everybody has a good story to celebrate. Obviously, people managing companies and supply chains hate this because you don’t have certainty. I’ve heard from a number of people, Just tell me what the rules are and whatever the rules are, tariffs, no tariffs, just tell me what the rules are and then I can adjust accordingly.”