Pulse Insights: China-US Trade Recovery, but Tariff Uncertainty Persists: What This Means for the Supply Chain

Recent signs of renewed trade momentum between the US and China have given a welcome boost to the global economic outlook. Despite a slump in the first quarter, China-US goods trade has rebounded, with a 13.7% year-on-year gain for the second quarter, alongside new bilateral moves to help stabilize economic relations. China-US goods trade accounted for 7.9% of China’s overall trade in the first half of the year, with US industrial companies investing in China once again.

There’s also news that a reciprocal tariff-cut framework is on the way, set to cover around $30B in goods. The framework is still to be announced, but is currently expected to impact across industries ranging from consumer goods and apparel to electronic components and industrial parts and products. This will be handled under the auspices of a newly established trade council between the two nations.

It’s welcome proof that both companies and economies are continuing to find ways to trade and grow despite recent geopolitical tensions and setbacks. While the trade recovery is a positive development, the operating environment remains highly dynamic and requires supply chains to stay adaptable. Ever-shifting tariffs and fluctuating policies still represent significant risk and serve as a reminder that today’s operating environment is still far from predictable.

The New Normal: Unpredictability

As a recent example, the moment the Section 122 tariffs expired in late July, we saw the US enact Section 301 duties on trading partners. This includes a 12.5% tariff rate for Chinese goods, a duty that will stack on existing standard rates.  

As Fabio Duque, APL Logistics’ Chief Operations and Commercial Officer for the US, LATAM, and EMEA region, highlights, there is an important signal beneath this welcome news. While global supply chains have become more diversified, they have not fully decoupled from reliance on China.

While the swing to China+1 sourcing strategies has diversified supplier networks and expanded manufacturing into additional markets, China continues to play a critical role in global manufacturing. This is driven by its production scale and productivity, combined with a massive supplier ecosystem and control over many key raw materials.

What This Means for Supply Chains

A strong supply chain strategy no longer means only reduced unit costs and short lead times. Today, geopolitical developments and trade or tariff shifts like these must be included in scenario planning.

Supply chains have become more distributed, but they are still highly interconnected, leaving the future less about further decoupling and more about strategic diversification. Duque believes that “the trade recovery will reinforce, not reverse, the resilience agenda” as supply chain leaders must adapt to a constantly shifting “new normal.” Resilience is no longer just about protecting against disruption, but about building the capability to adapt to it through:

• Multi-country sourcing
• Regionalization and nearshoring
• Greater supply chain visibility and scenario planning
• Leveraging AI for supply chain decision-making
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Together, these strategies all build the capacity to adapt supply chains quickly.

This also changes how companies should think about tariffs themselves. Additional duties will affect costs, of course, but now there is an operational impact as well. Changing trade policy can influence sourcing decisions, production allocation, transport routes, inventory positioning, and even customer service performance. This slots tariffs firmly into a planning and risk management challenge, not merely a procurement issue.

How Supply Chain Leaders Can Adapt

This kind of environment demands investment in end-to-end visibility across supply chains to monitor shipments, improve lead times, and provide the best possible outcomes. Another critical part of the strategy is developing strong trade compliance teams that can assess evolving duty programs and benefits and support better-informed sourcing decisions. Scenario planning and AI-supported decision-making can likewise help companies evaluate alternative routing and sourcing options quickly when conditions shift.

As Duque emphasizes, it’s common, but risky, to make decisions based solely on reducing supplier prices or negotiating lower logistics rates without knowing the consequences for downstream operations, particularly when tariff shifts are treated as merely a procurement problem. Cost management will always be important, but truly resilient operations must look at the entire supply chain, not isolated parts.

Here, tighter collaboration with both manufacturing partners and logistics providers can be invaluable in uncovering alternative transport flows and inventory strategies, or even redesigning networks to create savings on total logistics costs, not simply landed costs—without sacrificing service or market responsiveness.

Looking Forward for the Logistics Environment

Despite the welcome news from improving China-US trade relations, trade policy and tariff uncertainty are not going away. Instead, we see global supply chains evolving to operate despite this uncertainty. Rather than trying to predict every policy shift, companies should be investing in supply chain capabilities that allow them to be more responsive than competitors when disruption does occur.

We will likely never see a resumption of the pre-pandemic logistics environment. Instead, this is the moment for supply chain leaders to evolve their supply chains into more flexible and interconnected networks designed to perform even in an increasingly uncertain world. Success now depends less on avoiding disruption and more on adapting to it faster than your competitors.
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Disclaimer: This article is issued for general information purposes only. APL Logistics accepts no responsibility for any information contained within this article and disclaims and excludes any liability in respect of the contents or for action taken based on such information.