As President Trump halts reciprocal tariffs for 90 days to open trade talks with more than 75 countries, his administration has simultaneously escalated duties on Chinese imports to 125%. The message to supply chain leaders is clear: be ready for a prolonged realignment.
Policy Reset—or Strategic Repositioning?
In a sharp pivot from the blanket approach seen in recent weeks, the Trump administration has paused most country-specific tariffs for 90 days—while sharply increasing tariffs on China to 125%, the highest rate of his second term so far.
The pause applies to all countries except China, including close trading partners like Mexico, Canada, and the European Union. These nations will continue to face a 10% baseline duty, while existing sector-specific tariffs remain unchanged. According to Treasury Secretary Scott Bessent, the pause is intended to create space for negotiations after more than 75 countries reached out to the White House to initiate talks. Nations such as Japan, Vietnam, South Korea, and India have been described as “at the front of the queue.”
The reprieve offers temporary breathing room for many U.S. trading partners—but doubles down on what has become a grinding bilateral confrontation with China.
125% Tariff: The New Front in a Deepening U.S.–China Trade War
The tariff increase on China follows a series of hikes that began in February and accelerated sharply in April, stacking incrementally to a previously announced 104% effective rate. The new figure—125%—represents a further intensification of the White House’s pressure campaign.
China, for its part, has retaliated with an 84% counter-tariff on U.S. goods, which takes effect this week. The result is a trade relationship rapidly sliding toward a full commercial rupture.
Global concerns are mounting. World Trade Organization Director-General Ngozi Okonjo-Iweala warned on Wednesday that merchandise trade between the U.S. and China could fall by as much as 80%, with potential to cut global GDP by nearly 7%. She described the dynamic as a “tit-for-tat approach between the world’s two largest economies,” and urged caution as broader economic damage begins to manifest.
This is no longer just a bilateral dispute. As two of the most interlinked economies globally, the cascading impact of U.S.–China decoupling is already being felt in commodity pricing, regional sourcing shifts, and asset market volatility.
Strategic Calm in a Fragmenting Trade Landscape
The optics may suggest a softening—an olive branch to America’s trade allies. But for supply chain leaders, the 90-day tariff pause signals something more strategic: a pivot from broad confrontation to targeted economic alliances.
The White House appears to be creating room for selective deal-making, courting countries with whom a bilateral advantage is most feasible. For procurement and logistics professionals, this means planning for a two-speed global trade environment—one where China is increasingly excluded from mainstream sourcing strategies, while others reposition as preferred partners.
The tariff escalation to 125% is more than a headline. It represents a tipping point in trade policy where China is no longer treated as a problematic supplier—but as a systemic risk to be ringfenced and replaced.
Over the next three months, the focus for supply chain leaders should be scenario planning around this split. That includes assessing contract exposure to Chinese-origin goods, accelerating nearshoring or supplier diversification in Southeast Asia, and reevaluating logistics routing based on emerging trade corridors.
