Trump Tariffs on China: What Importers Need to Know Now
President Donald Trump did impose new tariffs on China in 2025, but the tariff picture changed again in 2026 after a Supreme Court ruling limited the use of the International Emergency Economic Powers Act (IEEPA) for tariffs. For importers, the key takeaway is not simply whether one tariff is currently in place. It is that China tariff exposure can change quickly based on the legal authority used, the product classification, country of origin, exclusions, and court decisions.
For businesses sourcing from China, tariffs remain a major planning risk even when specific rates change. Some IEEPA-based tariffs were affected by litigation, while other China-related duties—such as Section 301 tariffs, product-specific trade remedies, antidumping and countervailing duties, and customs classification decisions—may still affect landed cost. Companies should treat tariff planning as an ongoing sourcing and compliance process, not a one-time news update.
The History of U.S.-China Tariffs and What Changed
Since 2018, U.S. tariffs on Chinese goods have significantly impacted global trade. In 2025, the Trump administration used IEEPA-based executive actions to add duties on imports from China and Hong Kong. U.S. Customs and Border Protection said it was collecting an additional 20% tariff on goods from China and Hong Kong as of March 2025, increased from 10% earlier that month.
That legal authority later faced a major court challenge. In February 2026, the Supreme Court held in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs. The decision changed the status of the IEEPA tariff program and created refund and compliance questions for importers that had paid affected duties.
However, the ruling did not erase every tariff risk tied to China. The United States has other tariff authorities, including Section 301 actions, Section 232 actions, antidumping and countervailing duty orders, and product-specific measures. For example, USTR announced Section 301 tariff increases on certain Chinese-origin wafers, polysilicon, and tungsten products that took effect January 1, 2025. Importers still need to review the exact tariff authority, HTS classification, entry date, and origin rules for each product.
China has also used trade tools of its own. In 2025, China’s Ministry of Commerce and General Administration of Customs announced export controls on certain medium and heavy rare-earth-related items, requiring exporters to apply for licenses for covered goods. These controls can affect supply chains for magnets, electronics, batteries, motors, clean energy products, and other advanced manufacturing categories.
How Trade Policy Uncertainty Affects Businesses
The potential for future tariffs introduces significant risks for businesses dependent on Chinese manufacturing. Even when immediate increases do not materialize, companies should remain prepared for potential trade shifts. Key concerns include:
- Higher production costs if tariffs increase, return under a different legal authority, or expand to new product categories.
- Supply chain bottlenecks as businesses shift sourcing to avoid tariff exposure.
- Market uncertainty affecting price stability, purchase orders, customer pricing, and long-term planning.
- Customs risk if products are misclassified, incorrectly valued, or shifted to another country without meeting origin rules.
- Refund and documentation complexity for importers that paid duties later affected by court rulings or administrative changes.
Tariff uncertainty can also create indirect costs. A company may move a product to another country, only to discover that the new supplier lacks tooling capacity, material access, quality systems, or compliance experience. Another company may stay in China, but redesign packaging, adjust materials, or renegotiate supplier terms to preserve margin. The best answer depends on the product, not the headline rate.
Strategic Adjustments for Businesses Navigating Trade Risks
As trade policies continue to evolve, businesses must take a proactive approach to supply chain management to mitigate risks. Companies can safeguard their operations through:
- Tariff exposure audits: Review every SKU’s HTS code, country of origin, supplier, component origin, tariff authority, and total landed cost. Do not rely on product descriptions alone.
- Diversified sourcing: Expanding supplier networks beyond China to Southeast Asia, India, Mexico, and nearshore alternatives can reduce dependency on a single region.
- Cost optimization strategies: Adjusting product design, materials, packaging, assembly steps, and manufacturing processes can offset rising costs and protect profit margins.
- Supply chain resilience: Building multi-region supplier relationships can prevent disruptions from tariff fluctuations, export controls, freight delays, or sudden compliance changes.
- Customs and legal review: Work with customs brokers, trade counsel, or sourcing partners before changing origin, classification, or supplier structure. Incorrect assumptions can create penalties or delayed shipments.
- Agile manufacturing partnerships: Working with manufacturers that offer scalable production solutions can help companies adapt to trade shifts without sacrificing efficiency.
Should Businesses Leave China Because of Tariffs?
Not always. A rushed exit from China can be more expensive than the tariff exposure itself. China still offers deep supplier networks, tooling experience, component availability, engineering speed, and scale in many categories. For complex products, moving production may require new molds, new audits, new test reports, new packaging, new quality-control processes, and months of supplier development.
A China Plus One strategy is often more realistic than a full China exit. That means keeping China capacity where it still makes sense while developing backup or complementary suppliers in countries such as Vietnam, India, Mexico, Malaysia, Thailand, Indonesia, or Turkey. The goal is not to chase the lowest unit quote. The goal is to balance landed cost, speed, supplier capability, compliance, and risk.
Before moving production, companies should run a side-by-side sourcing model that compares factory price, tariffs, freight, duties, tooling, inspections, quality risk, lead time, packaging, testing, payment terms, and inventory carrying costs. Only then can the business see whether a sourcing shift improves margin or simply moves the risk somewhere else.
How Gembah Helps Businesses Stay Ahead of Global Trade Challenges
At Gembah, we help businesses navigate global sourcing and manufacturing with confidence. Our extensive network of vetted suppliers enables companies to adapt to changing trade policies, ensuring production remains cost-effective and efficient—regardless of new tariffs or policy shifts.
Gembah helps teams evaluate supplier options, compare China versus alternative manufacturing countries, model sourcing tradeoffs, and build more resilient manufacturing plans. Whether a company should stay in China, diversify with a China Plus One strategy, or shift production closer to the customer depends on the product’s materials, tooling, target market, compliance needs, and cost structure.
As the U.S.-China trade landscape continues to evolve, companies that take a strategic, diversified approach to sourcing and manufacturing will be best positioned for long-term success.
