Trump's 145% Tariff on Chinese Imports Halts U.S.-China Trade, Disrupts Economy

President Donald Trump's 145% tariff on nearly all Chinese imports, announced on April 2, has led to a significant decline in U.S.-China trade. Container ship departures from China to the U.S. have decreased by a third, and ocean freight bookings have dropped by 60%. The U.S. economy contracted by 0.3% in the first quarter of 2025, with canceled shipments and manufacturing halts. Industries reliant on Chinese imports, like fireworks, face shortages. The tariff has prompted retaliatory measures from China and criticism of Trump's trade policies, which have not boosted U.S. growth as intended.

Trade Comes to a Standstill

The imposition of a 145% tariff on Chinese imports has effectively frozen trade between the world’s two largest economies. According to data from Flexport, a global freight forwarding company, ocean container bookings from China to the U.S. dropped 60% immediately after the tariff announcement—and have remained at that level. The Port of Los Angeles, a key entry point for Chinese goods, expects arrivals to fall by 35% within two weeks, as “essentially all shipments out of China for major retailers and manufacturers have ceased,” said Executive Director Gene Seroka.

The number of massive container ships departing Chinese ports for the U.S. has fallen by about a third in April, according to reporting by The New York Times. This sharp decline is already straining global supply chains and is expected to intensify in the coming weeks as the backlog of pre-tariff shipments clears.

Economic Activity Slows

The economic consequences of the tariff are already being felt. The U.S. economy contracted at an annual rate of 0.3% in the first quarter of 2025, marking the first downturn in three years. While some of that decline was attributed to a surge in imports ahead of the tariff deadline, the broader slowdown reflects growing uncertainty and reduced business activity.

Retailers and manufacturers across the country are canceling orders, postponing expansion plans, and freezing hiring. “Major business decisions are on hold,” said Joseph Foudy, a professor at NYU’s Stern School of Business. “No one wants to expand or hire under this kind of unpredictability.”

The logistics sector is also under pressure. With fewer goods to move, ocean carriers have canceled 25% of their sailings, and layoffs are expected in trucking, warehousing, and retail. UPS, one of the largest logistics providers, cited economic uncertainty and a slowdown in demand from major e-commerce clients like Shein and Temu following the removal of the de minimis exemption for low-value imports.

Consumer Markets Brace for Impact

While the full impact on consumers has yet to be felt, signs of strain are emerging. The fireworks industry, which relies on China for 99% of consumer fireworks and 75% of professional-grade products, is facing severe shortages ahead of the July Fourth holiday. Wholesalers and distributors have canceled shipments and halted production for both this year’s celebrations and the 2026 semiquincentennial.

“The tariffs are too steep to absorb,” said Julie Heckman, executive director of the American Pyrotechnics Association. “Raising prices would make our products unaffordable.”

Seasonal goods such as Halloween costumes and Christmas toys are also at risk. Retailers warn that the limited production and shipping windows for these items make it unlikely they will arrive in time, even if tariffs are lifted soon. “Even if the tariffs were lifted in the coming days or weeks, there most likely wouldn’t be enough time to get the rest of the product to the United States before July 4,” one distributor told NBC News.

Industry Pleas for Relief

Industry groups are lobbying the White House for exemptions similar to those granted during Trump’s first trade war in 2019. So far, they have received no commitments. “The administration maintains regular contact with business leaders,” said White House spokesman Kush Desai. “President Trump, however, has been clear: if you’re worried about tariffs, the solution is simple. Make your product in America.”

But for many industries, domestic production is not a viable alternative. “That isn’t a good option,” Heckman said, citing the lack of infrastructure and expertise in the U.S. to manufacture fireworks at scale.

Global Trade Disruption

The effects of the tariff extend beyond China. Cargo from Southeast Asia has also softened, as companies reassess their sourcing strategies amid the uncertainty. The repeal of the de minimis exemption for e-commerce shipments from China and Hong Kong has further reduced volumes, prompting freighter cancellations and muted demand.

China has responded with retaliatory tariffs of 125% on American goods, escalating the trade war and further isolating the U.S. from global supply chains. The Chinese Ministry of Finance dismissed the U.S. tariffs as economically meaningless, stating they would “go down as a joke in the history of world economics.”

Political and Economic Fallout

The economic data has undercut the Trump administration’s messaging on trade. While the tariffs were intended to pressure China and boost domestic manufacturing, they have so far weakened U.S. growth while China’s economy grew at an annual rate of 5.4% in the first quarter.

“Trump wanted to show strength this week. Instead, the numbers showed weakness,” said Foudy. “This is a self-inflicted slowdown.”

Representative Brendan Boyle, the top Democrat on the House Budget Committee, was more direct: “Donald Trump has done something truly remarkable—in just 100 days, he’s taken a strong economy and driven it toward a recession.”

References

• Trump's 'Liberation Day' tariffs are threatening Independence Day fireworks
• Trump loses first round of trade war as US economy shrinks, China's grows
• Shipments from China fall as Trump's tariffs loom over economy
• Trump tariffs live updates: Trump administration quietly reaches out to Beijing to kick off tariff talks
• Trade wars reloaded: Logistics in the crossfire of US tariff fallout
• A Tidal Wave of Change Is Headed for the U.S. Economy