The NY Times reports the inadvertent or conscious advantage given to some Chinese exporters over American importers. Despite the Trump Administration’s bravado and anti-China bombast, Chinese companies like Temu and Shein can AVOID tariffs for purchases under $800 made by direct-to-American customers.
For example, if an American buys a $400 set of bowls from Temu, there is no tariff. However, if a store owner in Columbus, Ohio, imports the same bowl set from China, he might have to pay a 145% import duty. This assumes the Chinese distributor ships the bowl set to the Ohio store in the first place. Due to Trump’s tariff policy, many American-bound cargo ships have been held in China or diverted to other buyers in Europe. There is a reported 37% decrease in cargo traffic from China at a major West Coast port.
[Note: After the New York Times report appeared, the Trump Administration said it would close the Chinese direct-to-consumer loophole. They used the “we are reducing the flow of fentanyl” excuse as the reason. However, this action does not alter the coming disruption in the world’s supply chain and the possibility of a tariff war.]
The effects of the massive Trump tariffs will be completely visible to American consumers and businesses by June, since it takes Chinese cargo ships 20 to 40 days to cross the Pacific. The negative effects will be higher prices, empty shelves, or both.
A May 1, 2025 quote from Ana Swanson’s New York Times articles summarizes the coming situation:
Molson Hart, the chief executive of Viahart, a toy company, wrote on X: “It’s almost like we’re speeding towards a brick wall but the driver of the car doesn’t see it yet. By the time he does, it’ll be too late to hit the brakes.”
