The Trump administration came in with a wave of steep new tariffs — followed by pauses and reprieves and new tariff threats while bilateral negotiations go on. U.S. trading partners, meanwhile, have imposed retaliatory tariffs on some of our exports. 

It’s all proving disruptive and confusing to businesses and consumers.

The global credit insurer Allianz Trade recently surveyed 4,500 exporting firms in the U.S., Europe and Asia and found that more than six in 10 U.S. firms plan to reroute supply chains from China to avoid tariffs, shifting primarily to suppliers in Western Europe and Latin America. More than half plan to increase prices to offset tariff costs. 

Allianz Trade senior economist Maxime Darmet said there may be some “reshoring” to the U.S. in high-value-added sectors like automaking, semiconductors and pharmaceuticals.

But in low-value-added sectors, “such as toymaking, textiles — there’s no way they’re going to reshore to the U.S. because the labor cost is too high,” he said. 

China, meanwhile, is looking for new markets outside of the U.S. to sell more exports to, according to Columbia Business School economist Gernot Wagner.

“German car manufacturers are not going to like more, cheaper Chinese vehicles going into Germany. Consumers presumably like it,” he said.

European manufacturers could end up pressing for protectionist tariffs, Wagner added — just like the U.S. is imposing. 

Correction (May 22, 2025): A previous version of this story had an attribution error.