Rewire U.S.-China supply chains

President Donald Trump and Chinese President Xi Jinping met in Beijing this week with trade on the agenda after more than a year of tariff escalation forced companies to redraw supply maps. U.S. and Chinese manufacturers, retailers and exporters have spent that period shifting orders, adding suppliers outside China and the United States, and absorbing higher costs while policy changed. The disruption followed a rapid run-up in tariffs that at one point took U.S. duties on Chinese goods to 145%, according to NPR’s May 13 report and White House tariff orders issued in 2025. ### How did tariffs push companies to rework supply chains? April 2, 2025, was the starting point for the latest round of U.S. tariff action, when Trump signed Executive Order 14257 imposing additional duties tied to what the White House described as large and persistent goods trade deficits. The White House then issued follow-on orders on April 8 and April 9, 2025, raising duties on Chinese imports after Beijing retaliated, before another order on May 12, 2025, adjusted rates again to reflect discussions with China. (northcountrypublicradio.org) NPR reported on May 13 that the back-and-forth escalation reached a peak tariff rate of 145% on Chinese goods. AP reported the same week that the tariff war sent U.S.-China trade into a “freefall” and forced companies on both sides of the Pacific to regroup. ### What changed inside factories and sourcing departments? NPR’s May 13 report said manufacturers in both countries were dealing with lasting changes rather than a temporary delay in orders. (whitehouse.gov) The report described a shoe factory in Dongguan, China, whose owner said he wanted to diversify export markets after the U.S. trade war, and a U.S. factory facing the same pressure to rethink where it buys inputs and where it sells output. (northcountrypublicradio.org) AP reported on May 14 that companies were reorganizing suppliers and manufacturing footprints after bilateral trade nearly collapsed. That has meant moving some production to third countries, keeping backup suppliers in place, and accepting higher short-term costs to reduce exposure to one tariff decision or one customs lane. The account of those changes comes from AP’s reporting on the current talks and NPR’s reporting from factory floors. (northcountrypublicradio.org) ### Did trade flows actually fall that far? U.S. Census Bureau data show the United States imported $60.9 billion of goods from China and exported $27.4 billion to China in the first three months of 2026. The same Census series shows monthly imports from China at $21.1 billion in January, $19.0 billion in February and $20.9 billion in March, with a cumulative U.S. goods deficit of $33.5 billion for the quarter. (apnews.com) AP’s description of a “freefall” refers to the disruption caused by the tariff fight rather than the end of trade altogether. Census data show commerce continued, but at levels businesses were monitoring closely while tariffs, exemptions and negotiations kept changing. ### Why are old tariff orders still shaping current talks? May 12, 2025, remains important because the White House order issued that day explicitly said tariff rates were being modified to reflect discussions with the People’s Republic of China. (census.gov) The order also cited earlier April 2025 actions that had raised duties after Chinese retaliation, showing how the current framework was built through successive rounds rather than one single announcement. (apnews.com) Reuters reported on May 13 that U.S. and Chinese officials were expected to explore a managed-trade mechanism for non-sensitive goods and could identify about $30 billion of imports on which tariffs might be reduced. That report tied the current negotiations directly to the accumulated damage from the tariff war and the need to carve out limited channels for trade. (whitehouse.gov) ### What should readers watch next? Census releases on U.S.-China goods trade will show whether imports and exports recover in the months after this week’s talks. The White House, USTR and Chinese authorities are also the places to watch for any new tariff orders, exclusions or joint statements that change rates or carve out specific product categories. This week’s named participants are Trump, Xi and trade officials working on the next round of arrangements. (msn.com) Any concrete shift will show up first in an official order, a tariff schedule change, or the next monthly trade data release. (apnews.com) (census.gov)