• President Donald Trump made a temporary trade deal with China, reducing tariffs to 30% for 90 days.
• Supply chain experts told BI the deal is progress, but it won't reverse the tariff turmoil just yet.
• The US economy is still stuck in the "bullwhip effect," so prices and supply will remain in flux.

A temporary pause on sky-high tariffs between China and the US isn't really giving consumers much of a break from trade war chaos.

Five supply chain experts told Business Insider that, even with the recent reduction in Chinese tariffs, they expect to see continued disruption in the supply chain at least through the end of the year.

And, they said, the higher prices consumers are seeing on everything from fast fashion to electronics are probably only going to increase.

"While tariffs can be enacted with a pen stroke, it takes years to rewire global supply chains," John Lash, group vice president of product strategy at connected supply chain platform e2open, told Business Insider. "How this all plays out will be a complex formula full of surprises, with the general theme of higher consumer prices."

President Donald Trump has said that his trade strategy, while it may cause "short-term" pain for American consumers, will lead to more balanced trade relationships with our global partners, reducing or eliminating persistent trade deficits, and strengthening the US manufacturing industry.

Here's what supply chain experts said about what to expect in the meantime.

The 'bullwhip effect'

The bullwhip effect is a supply chain term used to describe how small disruptions create larger ripples throughout the chain of consumers, manufacturers, distributors, wholesalers, and retailers. It causes inefficiencies, inventory fluctuations, and price instability.

It's most often caused by unusual variations in demand, usually stemming from poor forecasting or bulk ordering — both of which the sector is dealing with now.

"We are in the bullwhip effect, but this would be what I call a policy-induced bullwhip effect," Nick Vyas, the founding director of the University of Southern California Marshall's Randall R. Kendrick Global Supply Chain Institute, told BI.

Businesses prepared for Trump's tariffs ahead of his inauguration by frontloading their shipping and stockpiling inventory. Then, when Trump's aggressive tariff strategy was announced in early April, they started holding shipments back to avoid paying higher fees. Ocean freight bookings to US ports from China decreased dramatically, restocking slowed, and jobs were cut across the shipping sector, Business Insider and other outlets have previously reported.

Now, Vyas said, we're in a "90-day refuel" where businesses will try to bring in as much stock as they can before the holiday season — and before the trade tensions have the chance to heat up again at the end of the temporary pause. But don't expect the supply chain snarls to clear up right away.

"I think this fluctuation, this back-and-forth cycle, the bullwhip is going to last us for at least the foreseeable future," Vyas said.

Continued shipping disruptions

Following a period of slowed-down activity at the ports, companies are now going to try to bring in as much inventory as they can over the next 90 days "because they don't know what'll happen" once the pause runs out, Chris Tang, a University of California, Los Angeles professor and expert in global supply chain management, told BI.

"So the port was empty, but now all of a sudden there's a big surge coming," Tang said.

That rush creates a new set of issues that will lead to increased prices, Bob Ferrari, a supply chain executive and managing director of the Ferrari Consulting and Research Group, told BI.

"Now, if this turns out to be as it has in the past, when all this activity comes in at once, then the container shipping lines scramble to handle all that volume in that short period of time," Ferrari said. That makes container shipping rates go up, raising the overall cost of transporting goods, he said.

Under the 145% tariffs, supply chain experts warned that Americans would see higher prices, empty shelves, and shortages within weeks. And while the lowered tariffs will reduce the extent of those impacts, the new tariffs and increased transportation costs will still lead to higher-than-normal prices, Ferrari said.

"You're going to see maybe double-digit price increases," he said.

Already increasing prices

Walmart, the biggest retailer in the US, has already started preparing its clients for continued price hikes. CEO Doug McMillon said in a Thursday earnings call that, though the temporary tariffs deal with China is a great start, it's not enough to keep prices down.

"Even at the reduced levels, the higher tariffs will result in higher prices," he said, adding that there needs to be a longer-term agreement between the two countries that lowers the tariffs even further.

Lisa Anderson, a supply chain expert and president of LMA Consulting, told BI she expects the overall effect of the tariffs to be "mildly inflationary," with some of the worst economic effects tempered by the recent trade deal, but ultimately "each industry or company could have a wildly different outcome."

But, she said, "over time, I'd expect for prices to stabilize after a near-term bubble." That's because "as companies move supply chains to the US, Mexico, India, Latin America, and other countries, they will offset the impacts of tariffs and be able to bring down prices," she said.

As for what kinds of goods this will affect, John Lash said discretionary products will see price hikes faster than staple items.

"And some goods we are used to buying may no longer be available," he added.

More trade turmoil on the horizon

Since they were first announced on April 2, Trump's sweeping tariffs — including a 10% baseline tariff and significantly higher tariffs on certain countries — have roiled the markets, wreaked havoc on the supply chain, and worried global leaders.

Trump's moves to increase the tariff on China to 145%, pause many country-specific tariffs for 90 days, and exempt certain electronic products from tariffs left business leaders concerned about continued uncertainty in the market.

Now, even after the first major trade talks between the dueling superpowers over the weekend, in which the US and China agreed to significantly lower their tariffs on each other, the uncertainty has persisted, since the US-China deal has another 90-day deadline.

As more tense negotiations creep across the horizon, Tang told BI that companies across the supply chain, which had already suffered a lot of damage following Trump's "Liberation Day" tariffs announcement, are still scrambling to catch up.

And it'll continue to be difficult for businesses to prepare for the future when they have no idea what Trump's next move will be.

"A complete trade deal is very difficult to pinpoint because, right now, I think the announcement is only a blanket statement — they still have to break down the details," Tang said.

"It's very important for the US government and work it out with China to have a really stable agreement — one way or the other, either high or low, just stick to it — so at least businesses know what they're working with," he said. "They don't need to be lovely-dovey to each other; you can cooperate and compete at the same time, but that's what's most important."

• President Donald Trump's tariff strategy is already causing price hikes and supply chain snarls.
• Logistics experts and shipping industry insiders told BI the effects are only going to intensify.
• Consumers can expect inflation, stock shortages, and higher unemployment, the experts said.

President Donald Trump's tariffs are already wreaking havoc on the supply chain, and several experts believe it could get worse.

Business Insider spoke with nine supply chain researchers, shipping industry insiders, and logistics specialists about the timeline for when consumers might expect to see the most significant effects of Trump's aggressive trade policy, should he maintain his current strategy.

They agreed that, in the coming weeks, Americans can expect major disruptions to the prices and availability of goods — store shelves may be emptier, prices will rise, and some products will run out sooner than others.

And if things continue on the current trajectory, four of them said, by the end of the year, those effects could be compounded, leading to higher domestic unemployment rates, global market instability, and increased geopolitical tensions.

Shipping rates are already down

Bookings of ocean freight shipments have been down significantly in the weeks since Trump's sweeping tariffs took effect. Though on April 9, the president paused his higher tariffs on goods from many countries for 90 days, his 10% baseline tariff on all countries remains in effect, as does his 145% tariff on imported Chinese goods.

During the first week of April, following Trump's initial April 2 tariff announcement, ocean freight container bookings saw a sharp global decline of nearly 50%, according to data from the digital logistics company, Vizion. Specifically, imports into the US fell 64% compared to the previous week, including imports from China to the US, which dropped 36%. Exports out of the US also dropped 30%, according to Vizion data.

In the following weeks, that nosedive continued in what Vizion has called a "tariff shockwave." For the week of April 14, ocean freight container bookings showed that overall US imports declined 12% week over week, and imports to the US from China declined 22% week over week, Vizion data shows.

"This is a big deal," Bob Ferrari, a supply chain executive and managing director of the Ferrari Consulting and Research Group, told Business Insider of the changes in shipping volume. "It has a lot of ramifications because it's something that the system is not equipped to deal with, and businesses are not equipped to deal with. It has a lot of far-reaching implications."

Front-loaded inventory is running low

Before Trump took office, let alone announced or implemented his tariffs plan, many major companies brought in extra inventory of products to the US in an attempt to mitigate the impact of potential tariffs, multiple supply chain experts told Business Insider. Trump implemented tariffs on countries including Mexico, Canada, and China during his first term and made tariffs a central part of his reelection campaign.

"I would say between one and three months of inventory, they tried to bring in early," Lisa Anderson, a supply chain expert and president of LMA Consulting, said.

But that buffer will run out — and soon.

With the tariffs against China currently at 145%, many companies have been forced to cancel their shipments of new stock and are in a holding pattern trying to wait out Trump's 90-day tariff pause to see what changes come next before placing big orders, Chris Tang, a University of California, Los Angeles professor who's an expert in global supply chain management and the impact of regulatory policies, told Business Insider.

"Right now, they're canceling orders, so the inventory will be running low, " Tang said of businesses. "And once they sell off this inventory, then it's either higher prices or no products."

According to data from supply chain research and analysis firm Sea Intelligence, canceled bookings of container shipments from Asia to both coasts of the US over the next few weeks are increasing drastically, in what the company calls a "quite extreme" scenario.

Multiple supply chain analysts told Business Insider that, in a normal business cycle, June through August is when end-of-year imports, like back-to-school supplies, fall products, and holiday merchandise, arrive in US ports. But the decreased volume of shipments and increased cancellations of shipment bookings that the industry is already seeing indicate that the normal cycle could be significantly disrupted, they said.

"There may be short-term stockouts, particularly in retail," Sean Henry, founder and CEO of the logistics startup Stord, told Business Insider. "And with brands streamlining their product lines, there will be a tighter selection of products in certain categories."

Ryan Petersen, the founder and CEO of Flexport, told Business Insider that if Trump makes a deal to lower the tariffs in time to bring back shipping bookings before inventory completely runs out, there will be minimal impact on consumers.

"But if there's no deal, then yes, there will be big shortages," Petersen said. "Probably worse than anything we've seen in our lifetimes."

Trump told Time on April 22 that he believes seeing tariffs as high as 50% in the next year would be a "total victory."

The 'bullwhip effect'

If the shortages start, further price hikes would be close behind, Ferrari said. Low-margin products that companies don't make a lot of money from — like toys, apparel, holiday items, and home goods — could see shortages and price hikes sooner than others, Ferrari said.

The exact date when Americans could start seeing the effects of those product shortages depends on how much pre-inventory companies have loaded up, Ferrari said, but added that consumers could see some price hikes as early as May or June.

"But once that occurs, then it'll be cascading," he added. Appliances and electronics could see the next round of price hikes and possible shortages starting in July or August, Ferrari said. And despite Trump's exemption of some electronic devices from tariffs, not every component of every device is included in that exemption, so Ferrari expects those to be affected as well.

Higher prices could then decrease consumer buying habits through major spending seasons, exacerbating the negative effects on the economy, Nick Vyas, the founding director of USC Marshall's Randall R. Kendrick Global Supply Chain Institute, told Business Insider.

"Imagine a mom, if her budget for back to school is exposed to 50%, 60% even 70% inflation, they will not be able to expand their budget to absorb that," Vyas said. "She will just say, 'Hey, if I was going to buy 10 things, now I'm only going to buy five things.' So that actually creates less demand, which creates consumer spending degradation. And all of a sudden, you start to see economic activity slow down, and this creates what we call in supply chain the bullwhip effect."

If consumers choose not to go out and spend money due to increased prices, demand decreases, Vyas said. Then, when all the backlogged supply that had been deferred and delayed in hopes that the trade environment would stabilize hits the market, there'll be no one interested in buying it.

"All of a sudden, now you have an imbalance between supply and demand," Vyas said. "And this becomes really the sort of crisis that we dealt with initially in COVID times, which was not pretty, where we had nothing, then too much of something, then nothing, then too much. When you go back and forth like that, the bullwhip is really bad for the market. It's bad for the industry. It's bad for retailers — for everybody."

The potential impacts in the long run

The longer it takes to work out a trade deal with China that lowers tariffs, the worse things could get for everyday Americans four supply chain analysts told Business Insider.

Margaret Kidd, an instructional associate professor of supply chain and logistics technology at the University of Houston, told Business Insider that the volatility of Trump's tariff policy is being compounded by numerous trade negotiations, the ongoing trade war with China, and potential new tariffs on pharmaceuticals, truck imports, and even Chinese ships.

"In the end, American consumers bear the brunt and become the downside partners of President Trump's tariff policies," Kidd said. "His approach could soon earn him the title of 'The President Who Canceled Christmas.'"

A continued trade war also has the potential to hurt US businesses.

Petersen told Business Insider the impact of decreased freight bookings "is already being felt."

"American companies are importing these goods, and if they have to cancel their bookings, their business is really suffering," Petersen said.

That means small and medium-sized businesses could close up shop for good, and hundreds of thousands of jobs could be lost across the retail, shipping, and logistics industries.

The Budget Lab at Yale on April 15 estimated that, if Trump's tariff strategy continues without deals, the US unemployment rate could increase by 0.6 percentage points by the end of 2025, and there could be 770,000 fewer people on payrolls.

And the international repercussions could be even more significant, Vyas and Tang said.

"If not managed properly, this could create a huge risk and drag the global economy into a tailspin," Vyas said. "And it would be a very difficult shock for us to absorb as a society, because the recovery process and the global trade world order could really go into disarray, which is actually contrary to what he's trying to accomplish."

In just a short period of time, Tang said Trump's current trade strategy could erode decades of relationship-building with our existing trade partners like Canada and Mexico. Vyas said that tension could drive our allies to create their own trade routes with China — the exact opposite effect of Trump's goals.

But Vyas said his biggest concern is the potential geopolitical conflict that could arise out of the trade war.

Still, he said he's optimistic that Trump will use the 90-day pause to strike a deal with many countries, including China, to lower their tariff rate and avoid the worst of the possible outcomes.

"Because what is alternative? If we ratchet up the continued pressure on China, we create the huge destruction of the global economy, to the point that it's as bad as the Great Depression of 1928 or something even bigger than that," Vyas said. "So then, when you think from that standpoint, I would say, why not be optimistic, because the alternatives are not that pretty."