The Trump administration’s decision to impose 145% tariffs on Chinese imports is sending shockwaves through global supply chains, as U.S. companies across industries cancel orders, abandon freight, and brace for widespread disruptions. While a narrow exemption was granted to technology products like the iPhone, PCs, and chips, the vast majority of businesses are facing mounting costs and operational paralysis.
“Almost everything is on hold as it relates to China business,” said Alan Baer, CEO of OL USA. The uncertainty surrounding the tariffs has led to a spike in abandoned freight and canceled bookings, especially in sectors like furniture, toys, apparel, footwear, and sports equipment.
Logistics in limbo: Freight processing and bonded storage
In response to the new tariffs, shippers are using tricks like bonded storage, slow shipping, and trade zones to avoid the higher costs. These let goods enter the U.S. without paying fees right away. While on the high sea, some even go an extra mile to repackage or relabel the goods to push back the duty costs.
Maersk, a top shipping firm, said tariffs will force big changes in U.S. routes. The company said this will trigger a “massive restructuring of all liner services to North America.” They also warned clients that fewer orders and possible fees on China-made ships would cause delays for months.
“And it will take months to sort out the mess, with congestion and freight rate spikes for months to come,” Maersk stated in a client update.
The unclear customs rules are making the crisis worse. Port workers say they often do not know about abandoned goods, and rules differ. Under the New York Terminal Conference Agreement, if goods stay for over 30 days, the port can sell them to pay for late fees. Who is to blame depends on the shipping terms. If the sender does not send the Bill of Lading to the buyer, then the sender is at fault.
“The current circumstances are unprecedented,” said Karsten Kildahl, chief commercial officer at A.P. Moller-Maersk.
What happens to abandoned cargo
Shippers often send a “letter of abandonment” to U.S. Customs, allowing for the sale or auction of cargo. The money covers costs like storage, and if there is any extra, it goes to the port. Some cargo goes to storage sites; some stays for sale. Firms like FR8 Auctions, JS Cargo, and Merchandise USA buy left goods and sell them in stores or online.
However, the U.S. tariffs on Chinese imports is quite sad, mostly for small brands, many of whom cannot absorb the unpredictable and elevated import costs.
“With prohibitively high tariff levels on U.S. imports from China, many companies have no choice but to cancel orders,” said Stephen Lamar, CEO of the American Apparel & Footwear Association. “That is not a risk or burden small business can sustain.”
He warned that the volatility will lead to immediate lost sales and product shortages. “An extension of the trade war pause to U.S. imports from China is needed now before the damage is irreversible,” Lamar added.
Shift to Southeast Asia not a silver bullet
Some firms are attempting to move production to Vietnam or India, but the transition is slow and costly, especially for complex manufacturing.
“Higher-margin and more technical goods, such as electronics, machinery, medical equipment, and pharmaceuticals cannot easily move sourcing,” said Alan Murphy, CEO of Sea-Intelligence. He noted these producers had been reviewing component sourcing and drawing down inventories but now face impossible timelines.
“The biggest concern here is a complete uncertainty of the actual end-game of the Trump administration,” Murphy said. “If the administration is actually pursuing a goal of U.S. reindustrialization, then the long-term plan for tariffs has to be clear.”
He criticized the “Yo-yo tactic of changing tariff rates on a daily basis,” calling it destabilizing for businesses and investors alike.
Perhaps the greatest challenge is the lack of a clear policy direction. Murphy said no Chinese-based producers his firm spoke with are considering relocating to the U.S., in part due to policy unpredictability.
For now, many shippers are taking a “wait and see” approach, according to Maersk. The company said clients across its global network are holding inventory levels low while seeking flexibility — a fragile position as the trade war drags on with no resolution in sight.
