Chinese Exporters Now Fear the Iran War More Than Tariffs
CNBC reported Tuesday that Iran war fears among Chinese exporters have surpassed concerns over U.S. tariffs. The shift comes as President Donald Trump and Chinese President Xi Jinping prepare to hold high-level talks later this week.
Iran War Becomes the Dominant Threat
Exporters across China are now focused less on tariff negotiations and more on the ongoing Middle East conflict. That is according to Wang Dan, China director at Eurasia Group, who has spoken with manufacturers nationwide. She said businesses barely raised tariffs when asked about their summit expectations. Contingency plans to scale back operations in the second half of 2026 are already being drafted if the war continues.
The conflict has strangled key shipping corridors and triggered a significant energy price shock. An input cost index tracking raw materials, fuel, and power in China jumped 3.5% year-on-year in April. That compares with just 0.8% growth in March, ending a prolonged period of deflation in industrial inputs.
One Exporter’s Costly Workarounds
Bryan Zheng, chief executive of Shenzhen cycling helmet maker Livall Tech, offered a ground-level view of the disruption. Maritime delays through the Strait of Hormuz have pushed transit times to roughly 50 days on routes that previously took 30 to 40. Zheng has been forced onto expensive air freight to keep European deliveries moving. Rail alternatives were ruled out after his smart helmet products were classified as dual-use goods given active conflict zones along those corridors.
Port congestion at Shanghai and Ningbo has compounded the pressure, with labor shortages and capacity limits slowing container movement across Asia-Europe trade lanes, CNBC noted.
Background: A Year of Tariff-Driven Adjustment
China’s exporters spent much of the past year absorbing the shock of triple-digit U.S. tariffs. Many shifted production into Southeast Asia and the Middle East and actively diversified their customer base. That effort paid off in relative terms. Chinese exports to the U.S. dropped 20% last year, while shipments to Africa surged roughly 26%. A bilateral trade truce did little to reverse those structural supply chain moves.
What the Summit Could Deliver
Yue Su, principal economist for China at the Economist Intelligence Unit, told CNBC that both Washington and Beijing are likely to reaffirm a shared interest in reopening the Strait of Hormuz. Even so, she cautioned that maritime standoffs and stop-start negotiations could persist well beyond any summit communique. Zheng himself warned that any ceasefire arrangement could prove fragile. Supply chain consultant Cameron Johnson of Tidalwave Solutions put it plainly: the Iran conflict is disrupting oil derivatives, fertilizers, and raw material flows on a scale that tariffs never matched.
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