The 90-day tariff deferral caused record freight reservations, rising prices and a rush to add factories outside of China before regaining duties.
News Analysis
When the words that Washington and Beijing agreed to a 90-day tariff suspension broke on May 12, the containers were quickly stacked up at Yantian International Container Terminal in Shenzhen, a port that handles more than a quarter of US freight.
The customs duties will expire on August 11th. If the negotiator is unable to reach a wider deal by then, a tariff of up to 54% could return to its original position.
Analysts say the 90-day truce only offers a short lifeline. It is locked into a new playbook of Rush Shipping, Floating Tariff contracts, and multicountry production hedges beyond the grace. Far from turning the trend around, it begins with Trump’s first term and bolsters the supply chain escape, which is accelerating in his current term.
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“The 90-day reprieve simply resets the clock,” US economist Davy J. Wong told the Epoch Times. “We have moved from ‘no deal or contract’ to chronic conflict. High tariffs remain as baseline, and exemptions could be a negotiation tip. ”
Washington added that it can be used as a lever whenever China’s industrial policy changes, allowing it to freely lift its duties or raise its lower duties.
Persistent defrost US-China trade tensions “It doesn’t seem like it will soon,” Sun Kuo-hsiang, professor of international affairs at Taiwan University, told The Epoch Times.
He said he is pushing the limit plants to stay in order to tweak and automate more factories overseas with each pause and regeneration cycle.
The port was clogged and I rewritten the contract.
Port Crunch is already rippling carrier manipulation.
Exporters are betting on speed.
Aerial view shows stacked containers in the port of Taycan in Jiangsu Province, eastern China on May 18, 2025. STR/AFP via Getty Images
The Chinese factory has cleared stocks, high margins and holiday items first backlogged, Sun said, saying long-term orders from major US retailers are prioritized.
Wong calls the tactic “early ships and the US West Coast stockpile.” This is an inversion of the usual pattern in which US importers build inventory. This time, Chinese exporters have even been sent unsold cargo throughout the Pacific to beat the watch.
If the duties return in August, cargoes that are re-transported could be re-routed through Mexico or Southeast Asia for repackaging.
Buyers and sellers are re-contracting just as quickly, he added.
Sun has seen more payment sales schedules and explicit cost sharing formulas when duties change, and the termination clause is becoming more stringent.
Factory on the move
Pacific producers are offering snapshots of how the 90-day truce is accelerating the old trends.
That calculation is reflected up and down the value chain.
A Chinese-made automobile, including Volvo and other brands, was located at the port of Nanjing in East Jiangsu Province, China on April 16, 2025. AFP via Getty Images
Pivot has been underway for years: By 2024, Vietnam will be Making Half of Nike shoes, almost a third of its apparel, 40% 39% of Lululemon products Adidas Footwear – proof that first-term Trump tariffs are driving the global supply chain.
Vietnam itself temporarily accepted mutual tariffs of 46% in the US, but its obligation has been suspended at a 10% baseline since April 9th.
Automation, “China + 1” surge
Sun Pegs 2024-2026 will add at least one production base to hedge risk elsewhere, while maintaining China’s scaffolding as an important window into the “China + 1” transition.
Electronics, apparel, toys and residential appliance manufacturers are leading billing in Vietnam, Mexico and Indonesia. He said high-tech companies are splitting new investments between China and alternative sites.
If robots and smart controls can adequately reduce unit costs, a few high margin lines could remain despite their duties, but we acknowledge that when US tariffs approach 40-50%, most plants cannot make the numbers work. In any case, the trade-off is less work from home.
Employees will move parcels from conveyor belts to automatic robots in the warehouse of Jindong Group’s logistics infrastructure warehouse in Wuhan, Hubei Province, China, on November 5, 2019. King/Getty Images
Still, push is the official policy. Under the 2025 blueprint manufactured in China, Beijing hopes domestic manufacturers of robots and control systems will win 70% of the housing market by 2025.
Sun expects automation to spread first, including machining automotive parts, large-scale appliance assemblies, and the production of industrial PCs and other embedded controllers.
Wong believes the second China + 1 wave emblem in the second half of 2025 is agile keeping the valued industry leaning against automation, digital twins and local fulfillment networks.
US bottlenecks, China’s risks
Scrambles are risky beyond freight charges, Wong said.
China still controls specialty chemicals, active pharmaceutical ingredients, precision mechanical tool parts and rare earth magnets, he said. Even a short delay can keep American plants idle for months.
At the same time, the capital that continues to drive this trade is under shock, Sun said.
Much of the rush is bank funding, Taiyo added. Short-term loans fund inventory and, if demand drops, unsold inventory becomes a “liquid black hole” for small and medium-sized exporters.
Conversely, when tariffs jump in August, Wong foreshadowed “localized industry-specific layoffs” in September at high-export Chinese hubs like Guangzhou and Jiangsu.
He added that factories lacking branding and domestic conversion channels will begin to emit workers first.
Labor-intensive workshops for toys, apparel and small appliances have already trimmed shifts, Sun said.
Career Eye exit
For marine airlines, calculations are simple. If demand collapses after August, vessels will remain at port despite low fuel prices.
The new contract will fine shippers who default to minimum load commitments, Sun noted, but without a stable amount, even fines could not run the vessel.
The Trump administration has warned that higher tariffs will return unless Beijing recognizes more status.
On April 10, 2025, Chinese cargo containers were stacked in the port of Long Beach, California. Patrick T. Fallon/AFP by Getty Images
For now, the ship is competing for the calendar.
“The pause and regeneration cycle is likely to remain here,” Wong said.
Sun repeated his vision. All ceasefires cut off rushing to ships, surges in fares and new hedges.
Businesses on both coasts are acting as if the age of predictable low tariffs is over, Wong added.
They pad their inventory, rewrite contracts, and uproot their supply chains. Not because of a one-off crisis, but for a future in which trade peace continues to last for the next 90 days.
Gu Xiaohua and Reuters contributed to this report.
