The United States announced tariffs on imported steel and aluminum under Section 232, a national-security trade law. Although not limited to China, these measures raised input costs for manufacturers and increased attention to where materials and parts were sourced. They also set the stage for broader tariff escalation in 2018.
U.S. Trade Representative (USTR) announced a proposed list of Chinese products targeted under Section 301, a law used to respond to unfair trade practices. The action focused on concerns about technology transfer and intellectual property. Companies began assessing exposure and considering alternate sourcing and production options.
The United States began imposing 25% tariffs on an initial tranche of Chinese imports often called “List 1.” China retaliated with its own tariffs on U.S. goods. This tit-for-tat phase increased uncertainty and pushed firms to map suppliers, shift orders, and renegotiate contracts.
A second tranche of Section 301 tariffs, commonly called “List 2,” expanded coverage to additional Chinese product categories. With more items subject to higher duties, importers increased efforts to re-source components, adjust product designs, or relocate assembly to avoid tariffs where possible.
USTR finalized tariffs on roughly $200 billion of Chinese imports (“List 3”), initially at 10%. The scale of coverage brought many more industrial and consumer supply chains into the dispute. Firms began shifting sourcing to other countries and building “China-plus-one” purchasing strategies to reduce exposure.
After negotiations deteriorated, the United States raised the List 3 tariff rate from 10% to 25%. The higher rate increased the payoff from relocating sourcing, qualifying products under different rules of origin, or moving final assembly outside China. Many companies accelerated supply-chain redesign projects that had been planned more slowly.
The United States imposed additional tariffs on another large set of Chinese imports (“List 4A”). This round reached deeper into consumer categories, increasing downstream effects on retailers, electronics supply chains, and seasonal inventory planning. Companies expanded diversion of orders to suppliers in Southeast Asia and elsewhere, while also weighing price increases.
A further set of tariffs (“List 4B”) scheduled for mid-December 2019 was suspended as the two countries moved toward a partial agreement. The suspension reduced immediate pressure on some remaining consumer product categories. However, it did not undo most earlier tariffs, so companies largely kept diversification plans in place.
The two countries signed the Phase One Economic and Trade Agreement, which aimed to pause escalation and set commitments on topics like intellectual property and market access. The deal did not remove most existing tariffs, but it created a more stable near-term planning environment for importers. Firms continued reconfiguring supply chains because tariff risk remained part of long-run strategy decisions.
As COVID-19 spread, reduced exports and emergency controls in China affected global availability of personal protective equipment and other medical goods. Shortages highlighted the risks of heavy reliance on single-country manufacturing for critical products. The pandemic reinforced “resilience” goals—such as stockpiles, multi-sourcing, and nearshoring—that had already gained momentum during the trade war.
When Phase One entered into force, the United States reduced the additional tariff rate on List 4A products from 15% to 7.5%. The lower rate eased costs for affected importers but kept a meaningful tariff barrier in place. Many firms maintained dual-sourcing and regionalization plans because policy uncertainty and compliance costs persisted.
By the time of the U.S. presidential transition, major Section 301 tariffs and many Chinese countermeasures remained in place, even after Phase One. This meant supply-chain changes—supplier shifts, partial relocation of assembly, and added compliance work—became more structural than temporary. The period closed with global supply chains more diversified and more explicitly shaped by geopolitical risk, not only cost efficiency.
US–China Trade War and the Reconfiguration of Global Supply Chains (2018–2021)