Why Americans can still expect higher prices even after Trump temporarily lowered tariffs on China

Katherine Tangalakis-Lippert,Grace Eliza Goodwin

Fri, May 16, 2025, 4:01 PM 6 min read

• President Donald Trump made a temporary trade deal with China, reducing tariffs to 30% for 90 days.

• Supply chain experts told BI the deal is progress, but it won't reverse the tariff turmoil just yet.

• The US economy is still stuck in the "bullwhip effect," so prices and supply will remain in flux.

A temporary pause on sky-high tariffs between China and the US isn't really giving consumers much of a break from trade war chaos.

Five supply chain experts told Business Insider that, even with the recent reduction in Chinese tariffs, they expect to see continued disruption in the supply chain at least through the end of the year.

And, they said, the higher prices consumers are seeing on everything from fast fashion to electronics are probably only going to increase.

"While tariffs can be enacted with a pen stroke, it takes years to rewire global supply chains," John Lash, group vice president of product strategy at connected supply chain platform e2open, told Business Insider. "How this all plays out will be a complex formula full of surprises, with the general theme of higher consumer prices."

President Donald Trump has said that his trade strategy, while it may cause "short-term" pain for American consumers, will lead to more balanced trade relationships with our global partners, reducing or eliminating persistent trade deficits, and strengthening the US manufacturing industry.

Here's what supply chain experts said about what to expect in the meantime.

The bullwhip effect is a supply chain term used to describe how small disruptions create larger ripples throughout the chain of consumers, manufacturers, distributors, wholesalers, and retailers. It causes inefficiencies, inventory fluctuations, and price instability.

It's most often caused by unusual variations in demand, usually stemming from poor forecasting or bulk ordering — both of which the sector is dealing with now.

"We are in the bullwhip effect, but this would be what I call a policy-induced bullwhip effect," Nick Vyas, the founding director of the University of Southern California Marshall's Randall R. Kendrick Global Supply Chain Institute, told BI.

Businesses prepared for Trump's tariffs ahead of his inauguration by frontloading their shipping and stockpiling inventory. Then, when Trump's aggressive tariff strategy was announced in early April, they started holding shipments back to avoid paying higher fees. Ocean freight bookings to US ports from China decreased dramatically, restocking slowed, and jobs were cut across the shipping sector, Business Insider and other outlets have previously reported.