Global trade tensions and tariff wars have been ongoing now for the last couple of months. Recently having picked up even more steam and becoming frontpage news. These economic conflicts affect industries worldwide and cause ripple effects. One that might be overlooked is the relocation industry. It is extremely important for global mobility managers, HR professionals and even standalone expats to understand the intricacies and implications these new tariffs will have.
What are ‘tariff wars’ and why are they happening?
A tariff war or trade war occurs when two or more countries continuously impose higher and higher import taxes or tariffs on each other's goods in retaliation to one another. These are usually rooted in economic protectionism to try and boost domestic production by making imported goods more expensive and less attractive for consumers. These tariffs can be contained to only a single sector, most often it encompasses every single export of the country the tariffs are raised against. Because of this, tariffs can cause many ripples in every industry as one price rise might cause the price of another item in a supply chain to rise and so on.
Present day tariff war
As of 2025, the United States and China are once again locked in a rapidly escalating tariff war, with both sides imposing a new wave of sweeping and often retaliatory measures on one another’s goods. The latest measures cover everything from consumer electronics and raw materials to agricultural products. On top of this we are getting higher and higher tariffs by the day. The tariffs as of now have reached a high of 145%. This would mean a product costing $10 instead becomes $24,50. These tariffs don't just impact America and China either, they disrupt the entire global trade flows. Many experts view this resurgence of protectionist policy as even more aggressive and in some cases, less predictable than during the original escalation years ago.
When did it begin?
But this conflict didn’t start in 2025. The current tensions are a continuation of a trade war that first began in 2018, during president Donald Trump's first presidency. Citing unfair trade practices the Trump administration imposed tariff revenue on hundreds of billions of dollars’ worth of Chinese imports. These tariffs were designed to combat issues like intellectual property theft, forced technology transfers, and a persistent trade imbalance that heavily favoured China. China responded with its own reciprocal tariffs on American exports, particularly targeting politically sensitive sectors like agriculture, steel and aluminum production, and automotive manufacturing. At the time, the US framed the tariffs as a necessary correction to decades of imbalanced trade deals, while China viewed them as an act of economic aggression.
Phase one and America first
Although a partial truce was reached in 2020 through the so-called “Phase One” trade agreement, many core issues were left unresolved. Tariffs remained in place through the Biden administration albeit with some attempts at negotiation and diplomacy. However, with president Donald Trump’s return to political prominence and a renewed emphasis on “America First” trade policy has intensified further actions. In response more Chinese tariffs were imposed and it became clear neither side intends to back down.
This renewed trade war is not just a political spectacle but it has real consequences for global business strategy, manufacturing decisions, and international workforce mobility.
How president Trump's proposed tariffs impact the United States
The renewed tariff war with China in 2025 isn’t just a political affair. It’s already reshaping the economic landscape within the United States. While tariffs are often framed as a tool to protect American industries and jobs, their effects are far-reaching and complex. With many short and long term effects that more often than not are less than favourable.
Short-Term Effects
Higher prices: With tariffs now reaching upwards of 100% on certain categories of Chinese goods. Many of these increased costs on goods are being passed onto the consumer.
Supply chain disruptions: Companies relying on components or materials from Chinese companies are scrambling to find alternative suppliers. Often at higher costs or longer shipping times.
Political signalling and support: For the administration aggressive tariffs increases offer a short-term political win by appealing to voters who feel left behind by globalization. This is especially true in industrial and manufacturing heavy regions.
Temporary domestic industry boosts: Some sectors, such as steel or certain manufacturing companies have seen a momentary uptick in demand as imports become more expensive.
Empty ports: Due to the lack of Chinese vessels arriving in the United States ports are significantly less filled. The two major ports in California for example have seen a drop of 30-40% of cargo volume. It has become so bad that on May 9th, not even a single ship has left for either of the major ports.
Long-Term Effects
Economic inefficiency: Over time artificially insulating industries from foreign competition can stifle innovation and lead to inefficiencies. Particularly in sectors where the US no longer holds a competitive edge.
Global isolation and supply chain re-routing: Major trading companies may seek more stable and predictable markets. Diverting investments and partnerships away from the US toward Europe or Southeast Asia. While also relocating supply chains away from the US in search for new foreign trading partners.
Business uncertainty: The unpredictability of tariff policy makes long-term planning difficult for companies. Leading to delayed investments, halted expansion plans, or even relocation of operations abroad.
Political and economic distrust: The constant back and forth of tariffs causes mistrust not just between the US and China, but among other global trading partners as well. It signals instability in US trade policy. This makes allies and investors wary of long-term economic cooperation. Over time, this erodes America's reputation as a reliable trading partner and weakens its influence in shaping global economic norms for years to come.
Labour market frictions: Skilled foreign employees in high demand sectors like tech may hesitate to relocate due to uncertainty caused by trade conflicts. Reducing talent acquisition for US companies.
Current trends in international relocation (May 2025)
As the US-China tariff conflict continues, the international relocation industry is adjusting to a rapidly changing environment. Several key trends are emerging that directly impact relocation companies:
1. Reduced traffic on key shipping lanes
Major US-China shipping routes have seen significant volume drops as companies pull back on imports. Maersk, one of the world’s largest container shipping companies, reported a 30-40% collapse in US-China traffic, with overall US imports down nearly 50% in recent months. This decline is largely driven by the surge in tariffs, which has made cross-Pacific shipping less economically viable for many companies. As a result, relocation providers may face fewer long-haul moves between these regions, impacting overall revenue.
2. Increased traffic on alternative lanes
While traditional US-China lanes are struggling, other routes are becoming more popular. Companies adopting “China+1” strategies are increasingly relocating production and key personnel to Southeast Asia, with Vietnam, Thailand, Malaysia, and Indonesia emerging as attractive alternatives. Meanwhile, European cities like Berlin, Dublin, and Amsterdam are benefiting from companies seeking more stable, tariff-free environments for regional offices and headquarters. This shift is creating new demand for relocation services in these markets, presenting growth opportunities for firms that can adapt quickly.
3. Shipping costs and surcharges
Despite the high tariffs imposed, shipping costs have actually been declining since they were imposed. This drop can be explained by the reduction in trade volume as companies shift away from US-China trade. With the reduced demand for container space the prices have similarly been lowered. That said, with a recently announced 90-day tariff pause agreed upon by the US and China, it’s expected that shipping costs will rapidly increase in the coming weeks. This surge comes as companies rush to restock before tariffs resume and is likely to strain available
4. Decreased stability and slower transit times
The ongoing trade tensions have made global shipping routes less predictable. Customs delays, rerouted shipments, and port congestion are becoming more common as companies try to avoid tariff-heavy regions. This not only increases the risk of loss or damage but also lengthens overall transit times. This adds stress for both relocation firms and their clients. In this environment, clear communication and proactive planning are critical for maintaining customer satisfaction.
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Why tariff rates matter for relocation companies
Tariffs don’t just impact the products being moved, they significantly affect the costs and logistics of the relocation process itself. For relocation companies this means higher expenses for essential supplies, equipment, and infrastructure, all of which can cut into profit margins and complicate pricing strategies.
For example, the cost of packing materials like aluminum, and plastics has surged, directly impacting the price of packing and protecting personal belongings of clients. Additionally the price of steel increasing makes the cost of shipping containers themself rise. Similarly, tariffs on office equipment and IT hardware can drive up the costs of corporate relocations, where companies often need to move entire office setups or critical IT infrastructure. Made more expensive due to the rising cost of semiconductors and other necessary hardware.
Additionally, the increased tariffs on moving vehicles and warehouse supplies can lead to higher overhead for relocation companies, as these items are critical for handling large-scale moves and long-distance shipments.
By understanding and accounting for these costs, relocation companies can better plan their pricing strategies, manage client expectations, and maintain profitability in a challenging market. Below you will find the most important tariffs that will have an impact on companies handling international relocations.
Impact on Relocation businesses summarized
Trade wars may start with goods, but their ripple effects quickly spread to the people and companies that move them. For relocation companies, the ongoing US-China tariff conflict is reshaping the landscape of global mobility. Understanding these challenges is essential for adapting to the changing market and maintaining a competitive edge.
Impact on Internal Costs
Relocation companies are experiencing a direct rise in internal operating costs. Higher tariffs on materials like aluminum and plastics have pushed up the price of packing and securing personal belongings. While steel isn't used for packaging itself, its rising cost affects shipping containers and transport infrastructure. Additionally, longer customs processing times and disrupted trade routes increase warehousing and labor costs. While more shipping lanes have opened up it does mean that the price per container on freight carriers have temporarily gone down.
Key takeaways:
Aluminum and plastic have become more expensive, impacting packing costs.
Rising steel prices increase the cost of containers and shipping structures.
Customs delays and route disruptions drive up storage and labor expenses.
Temporary decrease in price of container space on freight carriers.
Impact on Move Volumes
The increased financial burden and unpredictability are prompting many clients to reconsider international moves. Employers are now becoming more hesitant to assign employees overseas due to increased cost and uncertainty. Some destinations are more affected than others. As a result, relocation companies must keep a close eye on lead volumes coming in and, if their lanes are affected, orientate on opening new lanes to compensate for the decrease.
Key takeaways:
Rising costs are making employers more cautious about international moves.
International movers need to asses their lead volumes and possibly open new lanes.
Clients could require more hands-on guidance due to the changing landscape.
Impact on Supplier Costs and Logistics Chains
Price increases aren’t limited to internal expenses. Suppliers are also passing on higher costs due to raw material scarcity and increasing material cost. IT hardware is particularly affected by global chip shortages and supply chain bottlenecks. This is especially relevant for corporate relocations involving full office setups or critical IT infrastructure, where delays and extra costs are now common.
Key takeaways:
Suppliers are increasing prices due to shortages and logistics issues.
Semiconductor shortages are inflating the cost of IT-related relocation
Emerging opportunities
Despite these challenges, there are also opportunities for relocation companies. As businesses look to reduce their reliance on China, regions like Europe and Southeast Asia are becoming more attractive for corporate headquarters and manufacturing hubs. This shift creates new demand for relocation services, particularly for companies that can offer strategic advisory support alongside traditional logistics. Additionally, the trend toward remote and hybrid work models is expanding the range of services relocation providers can offer, including short-term assignments, lump-sum packages, and flexible move options.
Key takeaways:
More relocation demand towards Europe and Southeast Asia.
Businesses look to reduce their reliance on China
Final Thoughts
Trump's tariffs are more than a headline worthy conflict. These import tariffs and trade deals cause ripple effects throughout industries of all shapes and sizes. Remaining up to date on these escalations and staying informed is the best you can do. All the while staying flexible and agile to ensure your workforce continues to thrive.
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