The pause is set to begin on Wednesday, setting up a 90 day negotiating period between the two countries and guys.

 That is going to be an intense period of negotiation.

 We'll see where they land.

 The US and China have paused their escalating trade war.

 Tariffs on Chinese imports were cut to 30% from 145, still far higher than before the Trump administration regained office.

 Uncertainty plagues the shipping and freight industries, while the pause buys time, this is far from over.

 Insiders say the sudden, steep and temporary tariff cut has left companies scrambling.

 There is a new set of challenges and the old ones high prices, empty shelves and layoffs could still be ahead.

 It looked like 2025 was going to be a pretty remarkable year in recovery and and really for freight overall.

 But that changed.

 Trade between the US and China is, in fact collapsing amid the Trump administration's tariff policies.

 New tariffs on Chinese goods are pushing prices higher and forcing many U.

S.

 importers to halt shipments.

 There are so many different facets within the supply chain that the administration is not looking at right now, and that has a lot of people terrified.

 Cnbc dove into the world of freight to better understand what the uncertainty around tariffs means, and why some say they could push the U.

S.

 into a recession.

 America's nearly $1 trillion trucking industry expected tariffs, and many truckers even supported Trump.

 But they didn't expect tariffs would be so high, arrive so quickly, and come with so few exceptions.

 While the 90 day pause was welcome, it will still take about 4 to 6 weeks for product loaded onto Chinese containers to make it to the US, which means inventory shortages in the short term, the supply chain industry worries now about a capacity crunch.

 A frenzy of companies trying to get their orders in before the window closes.

 Shortages of space on cargo ships and trucks, and bottlenecks at ports.

 Damage is done.

 It's interesting to see that the the folks that are going to end up being impacted first are some of the most adamant supporters to Donald Trump.

 In his first term.

 Trump's tariffs on China topped out at 25% before the 2024 election.

 Trump called for 60% tariffs on the US's biggest importer.

 But I stood up to China like nobody has ever stood up before.

 Bringing in billions and billions and billions of dollars.

 Every politician, when they're running for office makes a lot of extreme positions.

 And you sort of say, well, that's the worst it will get.

 Most supply chain professionals guess tariffs would fall between 10% and 35%, according to one survey.

 Just one guest above 50.

 That was about a third of where they ended up before the pause.

 There were other differences too.

 During the first administration, those tariffs were given months in advance.

 We had very targeted tariffs on specific product categories with an enormous amount of exemptions.

 This time we had these tariffs.

 And basically you had a week to sort of get it together.

 When the tariffs were first announced, their sheer cost and the unpredictability of the situation prompted many companies to halt orders altogether.

 Prior to the pause, bookings were down 30% to 50%.

 20% of vessels coming from Asia to the West coast were cut 18% to the east coast.

 Container ship capacity from China to the US dropped by nearly half in May 2025 from a year earlier after the 90 day reprieve was announced.

 Companies that were holding back on orders rushed to get product in before more changes took place.

 The drop in orders gave way to a surge.

 Right now in China.

 But the game is going to be how do I get space on vessels? How do I find available containers to load out? Now, the biggest problem has been finding enough capacity on ships and trucks and making sure that product can get through ports.

 What will cause inflationary pressure and potentially problems with goods getting through the supply chain is if there's a metastasizing at the ports or the rail ramps where these containers enter in and you can't get those goods off dock.

 Here's a normal timeline for simple goods ordered from China.

 A company orders first five days.

 Supplier gets the order and starts planning production.

 Might take a month packing and sending to a port another four days.

 Three in customs.

 Then it crosses the ocean, goes through US customs and heads to a distribution center where it's processed, then off to a store where it gets stocked.

 All in all, about three months during Covid, customs clearance times on both ends and transit times to distribution centers all swelled out of control and clogged ports delayed ships.

 Tariffs are likely to bring different bottlenecks.

 Trump might want to rebuild U.

S.

 manufacturing, but it's more likely in the short term that companies shift to smaller exporters in lower tariff countries.

 Many may not have the capacity or experience to handle the flood of orders, since travel time takes weeks.

 In the best of circumstances, companies with lean inventories might still run out of product even if they have placed orders.

 There is already a tight supply of critical chemicals, which are used in everything from beverages to cleaning products, and construction supplies could run out completely before they are replenished.

 You can't just build a factory in five minutes and start filling the shelves.

 Globally, products across a wide range of categories are vulnerable to pressure from tariffs, leather, clothing, some crops, metals and many, many others.

 When the tariffs were at 145%, some were predicting customers might lose nearly $4,000 in purchasing power to the trade war.

 We were trying to get out of inflation.

 Now we're putting dollars on top of the prices right now.

 In addition to higher prices and empty shelves, the rapidly changing situation, including the sudden 90 day pause, has given the freight industry a pretty severe case of whiplash.

 In early 2025, these companies were just emerging from one of the worst recessions in their history, which really began a couple of years into the pandemic.

 Then, Trump imposed 145% tariffs on Chinese products.

 Back half of 24, early 25.

 A lot of folks just couldn't afford to stay in business.

 Some pretty large carriers have exited the market, especially in Q1 of 2025.

 The post tariff drop in cargo from China hit trucking next, threatening to plunge freight back into a recession.

 Now there's the opposite problem a sudden spike in demand.

 Not enough trucks.

 They don't have enough trucking capacity to handle a huge spike.

 So when they go back to market, they're going to go back to market at the height of demand, which means the rates are going to be considerably higher.

 Some commentators say the situation could escalate at any moment.

 We may just be in the eye of the hurricane.

 If a long term deal isn't reached.

 All the old risks a drop in shipments, inventory shortages and layoffs are still high.

 Imports make up about 20% of trucking volume, and import volume dropped in the weeks leading up to the deal by 35% in Southern California.

 That's where a lot of product from China comes in.

 Freightwaves estimated a 25% drop in import volumes across the country through June 2025.

 That is about a 5% drop in total trucking volume.

 Fuller said companies might be able to stomach a 30% tariff, though some of it will come out of customers pockets.

 Some kind of lasting trade deal isn't made, and tariffs shoot back up to 145%, or some level too high for companies to eat.

 Trucking could suffer mass layoffs.

 These are typically low margin businesses.

 They're very sensitive to unit economics.

 There is a correlation to the amount of volume to the amount of employees.

 If you get to 100% tariffs again and you get into an escalation of a trade war, more than likely that's going to slow down or stop global trade in transportation, that's going to have a very adverse effect.

 Empty shelves and stores also have knock on effects.

 Retail shortages can lead to cuts in advertising spending.

 It can hit payment processing companies like credit cards or software firms that service e-commerce.

 Every CEO that I've spoken with from the logistics community is saying that we will most definitely be in a recession because containers don't lie.

 Containers are showing us that they're not coming in.

 And then when they do come in, they're going to be a lot more expensive.

 And those costs will be passed on to the consumer.

 And the consumer is already strapped.

 The uncertainty places small businesses, especially at risk.

 They're not as able to absorb shocks like this.

 Supply chains aren't as established.

 They don't have the resources for backup plans, and margins are often already slim.

 There are not enough manufacturers here in the United States that can make items in general, let alone making smaller amounts of product.

 I have spoken with so many angel investors who are frightened that their startup companies that they're investing in are going to go belly up.

 The question everyone is facing now how to adjust in an ever changing environment.

 One day, 145% tariffs and the next day a 90 day pause at 30%.

 And even that level is high.

 These companies are all kind of in a limbo situation, right? Because they're not sure if the tariff is going to stick.

 Should they make extreme changes to the structure of the network, to their processes, to their policy, but they're just not sure.

 Basically, there are two ways companies can offset costs.

 First is change where they source products from.

 You can get it into, say, Central America or even even West Africa.

 You probably have a pretty good labor base there that can keep costs similar.

 But part of the problem there is maybe you don't have the labor trained to do the work, and so they're going to have to be some investments over time to make that type of thing easier.

 The overall uncertainty about what is going to happen after the pause, along with the fact that Trump is imposing tariffs on virtually the entire world, is paralyzing companies.

 Is it safe to to pick up a new supplier in South America somewhere? Or would you expect there to be tariffs that come in place down there? So you know where the safe landing zone is hard for these businesses.

 They can also try to reduce costs throughout the supply chain, such as by automating tasks that includes fleets of autonomous vehicles or robotics in warehousing and loading.

 I think there are opportunities for that in transportation, but still we have a whole bunch of people power that drives the transportation business, and that's not going to change anytime soon.

 The big question is how long does this continue? Right? And, uh, right now there doesn't seem to be an end in sight.

 What everybody is looking for right now is real deals.

 Rhetoric does not matter.

 You have to look at these trade deals.

 And if you look at things that are, quote a win, you have to see if it's really a win or if it's just bluster.