Global Trade Disrupted by Escalating US-China Tariff Dispute

The effects of the escalating trade war between the United States and China are becoming increasingly palpable across global markets. Despite sporadic speculation about potential negotiations, both countries remain entrenched in their positions, with no formal discussions underway.

At a recent press conference, Guo Jiakun, Spokesperson, China’s Ministry of Foreign Affairs, confirmed that “China and the United States are not engaged in any consultation or negotiation on tariffs.” He emphasized that “tariff and trade wars have no winners” and accused the United States of resorting to threats and blackmail rather than pursuing dialogue based on “equality, respect, and mutual benefit.”

The dispute intensified earlier this month after US President Donald Trump announced the imposition of “reciprocal tariffs,” including a steep 34% duty on Chinese imports. In retaliation, China responded with identical measures. As of late April, the United States has tariffs on Chinese goods totaling 145%, factoring in a 20% levy linked to allegations about China’s role in the fentanyl crisis, while China’s countermeasures stand at 125%. 

While Trump recently hinted that tariffs could be “significantly lowered” through negotiations, China has rejected overtures, demanding that talks would only resume once the United States reduces tariffs. Although Trump claimed a meeting had taken place, China’s Foreign Ministry categorically denied any consultations or negotiations, accusing the US administration of “misleading the public.”

China Moves to Soften Domestic Impact

In a sign of internal adjustment, China’s Ministry of Commerce formed a task force to identify US imports eligible for tariff exemptions. Companies are being asked to submit lists of indispensable products. Chinese media reported that tariffs have been lifted on eight types of US semiconductors, allowing businesses that paid tariffs between April 10 and 24 to apply for refunds, as previously reported by MBN.

Officials remain confident in China’s ability to maintain steady economic performance despite external challenges. Zhao Chenxin, Deputy Head, China’s National Development and Reform Commission, denounces US protectionist measures as “unilateral bullying” and stresses China’s capacity to ensure its grain and energy security without US imports.

Immediate Logistics Disruptions

The fallout from the tariff war has had a swift impact on global logistics, particularly across Transpacific shipping routes. Anticipating reduced demand, ocean carriers are withdrawing capacity at faster rates than during the early months of the COVID-19 pandemic, Flexport reports. Major shipping alliances, including Ocean Alliance and Premier Alliance, have suspended several weekly service loops. Ocean Network Express (ONE) suspended its PS5 and PN4 services originally scheduled for May 2025. ZIM Line temporarily suspended the ZX2 service due to the market conditions impacted by the reciprocal tariffs imposed by the United States.

TS Lines’ AWC2 service, linking Chinese ports to Los Angeles, will be suspended after its final voyage in mid-April. As shipping volumes from China decrease, carriers are shifting capacity toward Southeast Asian countries, notably Vietnam, confirmed eeSea.

According to Flexport, cancellations of weekly service loops have already surpassed 25% — higher than the 24% seen during COVID-19’s peak disruptions. Businesses shipping from key Chinese ports such as Yantian, Ningbo, and Shanghai are likely to face tighter capacity, higher costs, and longer delays beginning in mid-May.

Caution and Concern

A survey conducted by the International Chamber of Commerce (ICC) reveals widespread anxiety among global businesses. While the United States accounts for only 13% of global trade, the new tariffs are triggering mixed reactions across regions. Companies in East Asia report the most significant impact, while those in the Middle East and Africa feel relatively insulated.

The accommodation and food services sector — normally less involved in international trade — is feeling significant negative effects, possibly reflecting disruptions to tourism and imported supplies.

Large firms are particularly concerned about rising costs and global supply chain disruptions, while smaller businesses seem less immediately aware of potential downstream risks, exposing a critical blind spot.

John Denton, Secretary General, ICC warns against escalating tensions, likening the current situation to the oil shocks of the 1970s. He says that retaliatory actions could lead to global recession, sovereign debt downgrades in emerging markets, and severe supply chain disruptions. Denton urges global leaders to use this moment to revitalize the multilateral trading system rather than descending into “mutually assured destruction.”

Trade Slowdown Already Underway

The slowdown in trade is already being felt at major US entry points. The Port of Los Angeles expects a one-third decline in scheduled arrivals starting the week of May 4 compared to the same period last year. Airfreight bookings are also plummeting, the Financial Times reported.

Container tracking data from Vizion shows that as of mid-April, bookings for standard 20-foot containers from China to the United States were 45% lower than a year earlier. US import container bookings overall have fallen by nearly 23% over a three-week period, signaling widespread caution and reduced momentum in global trade.

Outlook: High Risks, Uncertain Resolution

According to information provided to the Wall Street Journal, the Trump administration is reportedly considering a tiered approach to gradually lower tariffs — potentially bringing overall duties on Chinese goods down to between 50% and 65%. Trump says that tariffs “will come down substantially, but it will not be zero.”