In the Trenches: What Our Supplier Trading Data Reveals About Tariffs

In the world of international trade policy, there’s no shortage of predictions and analysis. While tariffs on Chinese imports are currently paused, uncertainty remains about what comes next. Meanwhile, we’re seeing some fascinating real-world effects in our payment data that tell a more nuanced story about the impacts these changes have had in the trenches.

The Numbers Don’t Lie: China Trade Is Shifting

Our B2B payment platform, which processes more than $300 billion in transactions annually between buyers and suppliers across the globe, offers a unique window into how businesses are actually responding to these policy changes. The data is revealing.

U.S. buyer purchasing from Chinese suppliers dropped by 17% in Q1 2025 (calendar year) compared to the previous year – a dramatic reversal from the 21% increase we saw in the previous quarter.

For a fuller picture, we only have to look at February’s buyer purchasing activity, which directly coincides with when tariffs took effect on February 1st. February 2025 saw an even steeper 34% year-over-year decline in U.S.-purchasing from Chinese suppliers.

Reshoring? Not So Fast

There’s an expectation for manufacturing to return to American soil, but our data shows little evidence of this shift occurring – at least so far. That’s not exactly shocking though. Reshoring is a long-term, strategic endeavor and it will be years before the full effect of tariff-driven trade strategy is realized.

Domestic U.S. buyer purchasing has remained relatively flat compared to last year. This suggests that while U.S. companies are pulling back from Chinese suppliers, they aren’t necessarily redirecting that spending to domestic sources. They appear to be evaluating spend across their entire supplier network.

Cash Flow Pressures Increasing

Perhaps most telling is what’s happening with our early payment programs, particularly supply chain finance. In uncertain economic times, the certainty of payment becomes increasingly valuable. Our numbers reflect this reality.

In February and March of this year, suppliers opted for early payment on 3% and 6% more invoices, respectively, compared to the same months last year. This reverses the trend from January, when early payment requests were down 7% year over year – suggesting a direct correlation with the February tariff announcement. Interestingly, Chinese suppliers’ trade ratios have remained stable, likely due to lower Chinese base rates compared to U.S. supply chain finance program rates.

Recent Tariff Negotiations: Temporary Relief, Lasting Impact

Recent tariff negotiations resulted in tariffs being rolled back substantially. U.S. tariffs on Chinese goods will temporarily decrease from 145% to 30%, while China’s tariffs on American imports will drop from 125% to 10% for an initial 90-day period.

While this represents a welcome de-escalation, it’s critical to understand that this is a temporary arrangement for the time being. The agreement establishes a mechanism for continued discussions, but companies are still facing significantly higher costs than pre-tariff levels.

Will businesses that rushed to adjust their supply chains in February when tariffs were first announced reverse course? That’s unclear. Our data suggests that despite this temporary easement, the fundamental reshaping of supply chains is already underway – and smart companies are using this breathing room to accelerate their diversification efforts rather than abandon them.

Our Data in Context

What we’re seeing on our platform aligns with broader market trends. According to Vizion, a container tracking service, booking volumes from China to the U.S. dropped 45% year-over-year for the week of April 14, following the tariff announcements in early April. This mirrors the decline in buyer purchasing activity from U.S. buyers to Chinese suppliers we observed in Q1 2025.

Supply chain disruptions have reached unprecedented levels. CNBC reported in early May, U.S. imports experienced a week-over-week decline of 43% in container shipments through April 28th, with Vizion’s CEO Kyle Henderson noting, “We haven’t seen anything like this since the disruptions of summer 2020.”

Perhaps most notably, contrary to some predictions that tariffs would increase domestic sourcing, a CNBC Supply Chain Survey found that reshoring to the U.S. is unlikely to be the primary outcome. The survey revealed that rebuilding domestic supply chains could double costs for many companies, leading them to seek alternative low-tariff regions instead of moving production back to America. This aligns with what our platform data is showing.

What This Means for Your Business

As trade tensions continue to evolve, companies need to focus on financial supply chain resilience just as much as physical supply chain diversification. Early payment programs become increasingly attractive during uncertain times, with our data showing suppliers seeking the certainty of payment through higher trade ratios.

Supply chain finance solutions are proving particularly valuable now for several reasons:

• They provide crucial liquidity during supply chain transitions.
• They offer certainty in an uncertain trade environment.
• They help manage the increased costs associated with even the reduced tariff levels.
• They build resilience against future tariff fluctuations.

This trend is supported by industry forecasts. According to Global Finance Magazine, the worldwide supply chain finance market is expected to reach $15.2 billion by 2033, driven largely by economic and geopolitical pressures reshaping how businesses approach working capital needs. They note, “As the world edges toward an age of deglobalization, supply chain finance is increasingly seen as a powerful tool for enhancing supply chains’ resilience and flexibility.”

We’ll continue monitoring these patterns for trends in Q2 and sharing insights as the situation develops. Stay up to date on our blog.