• Trump's tariff reversal on Chinese goods has complicated the math for US importers.
• A week ago, delaying duty payments seemed smart — now, it may make sense to pay early.
• And then there's the issue of what to do with the surges of arriving inventory.

Just when US importers were starting to make sense of President Donald Trump's 145% tariffs on Chinese goods, the negotiator-in-chief changed the deal again.

Now, with the plans on pause and current import tariffs dropping down from 145% to 30% for China, importers are having to rethink how — and when — they bring goods into the US, according to Ben Dean, VP at warehousing network Flexe.

Tariffs are indeed a lot lower than they were last week, but they're still far higher than they have been for years, and there's no clear answers about which way they'll go in the next 90 days or beyond.

All of that has importers looking at an even wider menu of warehousing and transportation options than they were just a short while ago — if they're not biting the bullet and paying the tariffs outright.

Before Monday's announcement, the 145% tariffs on Chinese goods made for rather simple (if unpleasant) decision-making, since they were so high they effectively blocked all but the most essential products from crossing the Pacific.

For goods that were already en route, many businesses turned to a specialized type of storage facility, known as a bonded warehouse. These facilities allow importers to park their goods duty-free for up to five years, and only pay the tariff charge that is in effect at the time they accept their inventory.

"By holding the goods under bond, there's the possibility that they might pay at a lower rate," Dean said in a previous interview with Business Insider.

In a follow-up interview after the tariffs fell to 30%, Dean told BI that, as expected, interest in bonded warehousing has fallen precipitously — though not entirely.

Now, he said there's more interest in foreign-trade zones.

FTZs are somewhat similar to bonded facilities in the sense that they allow importers to delay payment of tariffs, but the key difference is that FTZ lock in the tariff rate at the time of arrival, rather than when the items leave the facility and officially enter the US.

"Should we not make progress on a formal agreement and in 91 days, rates shoot up again, that is a risk," Dean said.

At least now, "there's an upside risk, which we didn't have" before, he said.

Dean also said demand is up for trains and short-haul trucks, while long-haul trucking rates are comparatively down — an indication importers are trying to slow the roll of previously rushed inventory.

"The need for speed has gone away, and slower and more economical transportation modes are now coming into high demand," he said.

In other words, importers who brought inventory in ahead of tariffs are using the country's hundreds of miles of train tracks instead of actual warehouses to effectively hold their merchandise until it comes time to sell it.

For the impending surge of new shipments — container bookings are up nearly 300% between the US and China this week — Dean said there is ample warehouse capacity to receive it.

"The ports are trying to get their things in order to make sure that that surge can get off the ship," he said. "And everybody's seeking to avoid any kind of headline event like we had off the Port of Long Beach during the peak of COVID," when massive backlogs on the docks kept container ships lingering at anchor for weeks.

Even so, there could still be some capacity challenges at the West Coast ports in the coming weeks.

"We are — in real time — changing the economics of the cost of inventory," Dean said. "We're getting this real pilot to see what happens to our supply chain domestically when that happens."

• 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."

• Hospitals face frequent disruptions in inventory for supplies like IV fluids and medications.
• Mayo Clinic, Cleveland Clinic, and Rush University Medical Center leaders talk about managing that with AI.
• This article is part of "How AI Is Changing Everything: Supply Chain," a series on innovations in logistics.

When Hurricane Helene hit North Carolina in late September, it caused more than $59 billion in damages.

Among those businesses damaged was one of the US's main manufacturers of IV fluids, used to rehydrate patients and give them medicine. The resultant shortage forced hospitals to conserve and reduce their use of IV fluids, which led to canceled surgeries and treatment delays.

Such disruptions to hospital inventory have long been hard to predict and difficult for hospitals to navigate. At the same time, keeping too much of a given item on hand is wasteful. In 2019, hospitals spent about $25.7 billion on supplies that they didn't need, the consulting firm Navigant found in a study of over 2,100 hospitals — about $12.1 million for an average hospital.

To reduce waste, while ensuring providers have the medical supplies they need, some leading hospital systems are using automation, predictive analytics, and other forms of artificial intelligence to manage inventory.

Business Insider asked supply chain managers from three systems — the Cleveland Clinic, the Mayo Clinic, and Rush University Medical Center — about how they use machine learning, generative AI, sensors, and robotics to anticipate shortages and help with contracting and ordering.

The following has been edited for length and clarity.

Business Insider: What are some of the most effective and innovative ways that you're making use of AI?

Joe Dudas, Mayo Clinic's division chair of supply chain strategy: We've deployed autonomous delivery and robotic warehouse fulfilment — robots that pick orders.

We're advancing our algorithms for auto-replenishment to be even more accurate. We're also using AI to explore savings opportunities and understand the sustainability of those opportunities over the length of an agreement, based, for example, on demand.

We're doing advanced analytics in high-spend categories — we're just getting a lot smarter about what's happening with a little bit more precision. Even our expense management, we're looking at profit and loss, and supply expense, to understand what's happening from a budgetary perspective. Based on the present and what's happened in the past, we can look forward with some degree of accuracy.

Geoff Gates, Cleveland Clinic's senior director of supply chain management: In some of our tools, instead of having someone click lots of buttons and type data into 20 or more fields, for example, we have been able to automate that process with AI, which saves employees 20 minutes every time. Those are the tasks that are the biggest benefit from a pure efficiency standpoint — they let people focus on other things.

We also use AI for document recognition and have been using it to manage invoices through our ERP inventory-management system for the last four years. If a medical-supply rep has a bill sheet that needs to get processed — to create a purchase order — the rep submits it, and our tool automatically creates a requisition.

With distribution, our goal is to create a better view of what we have within our health system and the hospital. Our goal with key suppliers is to be able to see which supplies they have in their warehouses and to predict disruptions. For instance, if we can see that a supplier doesn't have a shipment coming in, the system would alert us that we'll have a problem in two weeks.

Jeremy Strong, Rush University Medical Center's vice president of supply chain: For inventory management, we have weighted bin systems in all heavy-volume areas. When a nurse takes something out and puts something back in, we know it.

Once we implemented that, we could start to be proactive. We have a system that includes our distributor's data about inventory coming into their distribution center. They can see where our utilization patterns are changing. Then AI reviews all that. A back-order dashboard creates alerts when automatic supply-refill levels across the system are low, inventory is low at the distribution center, or shipments from manufacturers are taking longer than anticipated. We can anticipate that we're going to run out in a week from now or going to have a back-order problem.

We also use it in contract management. When a contract is loaded in, AI will send it to the category manager with a summary and potential clauses to review. It can also automatically send contracts to the cybersecurity team for approval. If it has patient information, it sends it to the risk lawyers. If it has indemnification, it sends it to our regular lawyers.

What are some of the advantages of automation that your system has realized?

Dudas: Our automation gives us agility. We can see things sooner and adjust faster because of our technology but also because of our talent.

Somebody asked me the other day, "Where are you advancing?" I said, "We're not advancing. We're keeping up with all of the curveballs we get thrown on a day-to-day basis."

Gates: At this point, the tools have touched almost everyone in the supply chain. Even a specific process that only impacts one or two people who were doing those tasks allows us to be more efficient and accurate.

Strong: The goal was to move from being reactive and putting out fires to being more predictive, to prevent fires from happening, see things ahead of time, and be more efficient.

We've also sped up contract review. We cut the time it takes to review them in half and more than doubled the number of reviews each contract gets.

What advice do you have for other companies interested in implementing AI to streamline inventory?

Dudas: Recognize that you can't do everything yourself. Even as big as our organization is, it's not big enough. Scale is your friend in the supply chain.

Gates: Some things weren't necessarily the biggest opportunities to start with, but they were low-risk processes that gave us the skillset needed to leverage AI.

We're most focused on finding the right solution for the problem rather than forcing a solution.

Strong: The best tasks or processes to tackle are ones that are repetitive or require pulling and summarizing data from multiple digital sources. Tackle these, and you can gain efficiencies, improve productivity, and be proactive.

• Donald Trump wants Apple to make iPhones in America.
• There's no chance that will happen, says Patrick McGee, a journalist who just published a book on Apple's deep ties to China.
• McGee also argues that Apple's end-around on Trump's China tariffs — saying that some iPhones and other products are made in India and Vietnam — is misleading.

You probably know that your iPhone, and just about any other Apple product you own, was made in China. And that Donald Trump wants Apple to move all of that production to the US.

But do you know how, and why, Apple ended up so dependent on China — and why that's so unlikely to change?

Patrick McGee says he does. He's a journalist who just published "Apple In China: The Capture of the World's Greatest Company" — a detailed look at all of the money and effort Apple spent over decades to enmesh itself in China.

McGee, who has covered Apple for the Financial Times, explains why this has been enormously helpful to Apple — because it created an ecosystem that lets it make ultra-complicated devices at vast scale. But he argues that it was even more helpful to China — because Apple gave Chinese engineers access to valuable technology that has let them build other high-value supply chains.

And that McGee posits, has created both a problem for Apple CEO Tim Cook — because he can no longer practically extract the company from China — and for the US — because its adversary is now using American know-how to compete with American companies.

(I asked Apple if it wanted to weigh in on McGee's book. Via a rep, the company said that "claims in the book are untrue" and "filled with inaccuracies" and that McGee didn't fact-check the book with Apple.)

I talked to McGee for the newest episode of my Channels podcast. In the edited excerpt below, we talk about why he thinks it's impossible for Apple to move iPhone production to the US. And why McGee thinks that Apple saying it's moving some production to India and Vietnam, in order to escape some US tariffs on China, is deeply misleading.

Peter Kafka: The Trump administration says it wants Apple to move all of its manufacturing to the US. You and anyone else who knows anything about Apple saying that is literally not possible when it comes to the iPhone. Why?

Patrick McGee: We're lacking so many things. The density of population is one. Lots of people know a factory town [in China] might have 500,000 people just putting together the iPhone. The thing that people don't understand is they're not doing that year-round. They're doing that for three or four months.

And then they're moving on to another project. So Apple doesn't bear the cost. It's using the likes of Foxconn to do manufacturing as a service.

There's an analyst quoted last month who said it would be like if in the city of Boston, every person dropped what they were doing and just worked on iPhones. And as quotable as that is, that understates the challenge. Because it would like the city of Boston transporting itself to some other place, like Milwaukee, assembling iPhones for a few weeks and then moving on to some other project.

China has this floating population — that's literally what it's called — and that workforce alone is greater than America's entire labor force. So we're never going to match them in terms of density of population and, more especially, dynamism of the population.

Let alone that it's happening at way lower labor rates. Let alone it's got way better machinery and automation. It's not a matter of willpower and cost — that seems to be what the MAGA dream is based on. It goes so much beyond this.

We often say Americans don't want to do these jobs. The Chinese don't want to do these jobs. But there are so many people that would rather be doing that than toiling in the fields for 14 hours a day. We just don't have a base of labor that would do that.

One of the other arguments you and others make is that China has people, but there's also just huge infrastructure: a whole series of plants and subplants and subcontractors that all are sort of built around getting Apple the products it needs, at a drop of a hat.

Yeah. In the amount of time that it would take China to build a new factory, we would still be doing the environmental paperwork.

But in Apple's most recent earnings call, the company said that for the next quarter at least, every iPhone they sell in the US is going to come out of India, and most of the other electronics they sell in the US — AirPods, etc — are going to come out of Vietnam.

So what am I missing here? It makes it seem like Apple has gone ahead and figured out how to move this stuff out of China.

Not at all. Think of it like this: If there's a thousand steps in making an iPhone and the final one is now in India, you're avoiding tariffs. The final assembly is considered "making it in India."

Like if I took every step of baking a cake except for putting the icing on or ...

Putting it in the box or something.

Honestly, not much is happening in India. That might change in the next five to 10 years, but the idea that there is actual production happening in India is just wrong.

If you buy an iPhone next year, it'll say "made in India." I think that's a near-certainty. But that phone will be no less dependent on the China-centric supply chain than any other iPhone you've ever purchased.

On that earnings call, Apple also said that the existing tariffs will cost them $900 million in the next quarter. That may sound like a big number, but Apple makes $100 billion in profit a year, so it's not. If that was just the only impact from the tariffs, that seems like a pretty solvable problem for Apple: They have to move final assembly to India, and eat some costs, but they could do it.

Yeah, absolutely.

Where I think things are much dicier is that the political ties that Apple has with China are unbreakable. I shouldn't say political ties — I really mean the business ties. They are not going to leave China anytime soon.

Yet the technological transfer that is engendered by designing cutting-edge products every year and building them in China inherently causes a technology transfer from America to China on a crazy level. And if you think of China as a threat, if you think of them as America's biggest adversary, it is insane that the world's greatest company is equipping China with this technological know-how year in, year out.

The Wall Street Journal just reported that Apple is thinking about maybe tacking on some of these additional costs to the next round of iPhones they start selling this fall — passing those costs on to the consumer. Does that sound right to you?

Yes, because the other alternative is that you're squeezing out more from your suppliers. Some analysts have suggested that, and it's kind of laughable. Because if there's anything to squeeze out of the supply chain, you damn well better know that Apple's already done it. Apple pays its suppliers very slim margins. There are not a bunch of fat cats out there that they can just be squeezing

• Crab fishing is a laborious job that involves measuring and sorting crabs and recording data.
• SeafoodAI's CrabScan360 is designed to automate tasks usually done by hand to improve efficiency.
• This article is part of "How AI Is Changing Everything: Supply Chain," a series on innovations in logistics.

Crabbing is grueling work.

Fishers first prepare their crab-catching pots. Then, they boat out to sea and drop them. Inside their boats, they use devices that record the coordinates for where the pots have come to rest on the ocean floor. Then, they head back to land and wait.

Later, after 12 to 24 hours, but in some cases up to a week, fishers return to the same coordinates, pull in their pots, and examine their catches.

This is where the real work begins. Every jurisdiction has rules dictating the size and weight of crabs that fishers can harvest, so crabbers must measure each crustacean's weight and shell size and then count, grade, and sort their hauls, as well as record the data they've collected, before they can consider the catch a job officially done. Until recently, most of these records have been written by hand in physical logbooks.

Managing these tasks and meeting rising consumer demands for sustainable crab meat isn't easy. But a startup in Palo Alto, California, called SeafoodAI, says it has an AI-powered solution.

In April, SeafoodAI released CrabScan360, its tool designed to automate crab measurement, sorting, and data recording.

Rob Terry, SeafoodAI's founder and CEO, told Business Insider that CrabScan360 acts as a "tireless deckhand" who uses AI-powered technology to collect all necessary data, including every crab's size, weight, and grade. The software also uses this data to determine which crabs can remain part of any given haul and which ones fishers must toss back into the ocean.

How AI is helping crab fishers

CrabScan360 comes in two versions: one for the field and one for the factory.

The portable field version, released in April, is about the size of a carry-on suitcase and was built to deploy quickly on boats and docks. Fishers put one crab at a time on the scanner, and the device snaps photos. It uses sensors and built-in custom software to instantly analyze and log each crab's size, weight, gender, and legal status.

The factory version, which is in development, is fully automated. Crabs move along a conveyor belt and pass under a scanner that evaluates each one. Crabs are then sorted based on the analysis. Each scan creates an individual data record that's uploaded to the cloud. Users can then log in and see trends such as average size, yield, and legal catch percentages across an entire harvest.

CrabScan360 also creates a digital fingerprint for every scanned crab, providing "instant, accurate digital records tied to the specific harvest location, time, and date," Terry said. This data travels with each crab as it moves through the supply chain, creating a clear chain of custody from pot to processor.

"This makes it easier to trace quality, reduce mistakes, and prevent waste," Terry said. "With better data at every step, seafood companies can make faster, smarter decisions about what to keep, how to price it, and where it should go, leading to a more efficient and profitable supply chain."

The AI behind the digital fingerprint also helps prove that each catch is sustainable, an increasingly important credential, as leading retailers such as Whole Foods, Walmart, and Costco have committed to exclusively selling sustainably certified seafood by 2027 or earlier.

What's next for AI-powered seafood technology

Terry said that as SeafoodAI rolls out CrabScan360 to more customers, it plans to build a database to digitally connect harvesters, processors, regulators, and wholesalers with information about crab hauls in real time.

The company also plans to expand to other seafood markets, such as tuna, salmon, and shrimp, all of which have unique data collection requirements.

"Our approach lays the foundation for a more efficient, scalable, and transparent model, especially for small and medium-scale producers who are often excluded by cost or complexity," Terry said.

"It's a modern solution designed to meet the rising demand for trusted, traceable seafood."

• Elon Musk may have become bored with the solved problem of manufacturing EVs.
• Musk's focus shifted from EVs to AI, robotics, and politics, leaving Tesla's core business untethered.
• A Tim Cook-style CEO could take Tesla operations to new heights, similar to Apple's post-Jobs success.

This "open letter" might be fake. It could be real. I don't know, but it reminded me of a column I've been wanting to write.

The letter is purportedly from disgruntled Tesla employees who want Elon Musk to stop being CEO so the company can go back to selling lots of electric vehicles. His DOGE bender has damaged Tesla's brand so much that he should step back, according to this alleged letter.

Even if this is a made-up missive, it raises an interesting question: Why would the CEO of the world's most valuable car company wander off for months to pursue political dalliances when the electric vehicle battle has just entered a new, crucial stage?

The answer may be simple: Elon is bored making cars.

He spent the last decade working his butt off to pull Tesla out of near bankruptcy and turn it into the dominant EV company of the Western world. There was a lot of innovation and many sleepless nights.

But now, one could argue, EV manufacturing is a solved problem. Tesla has gigafactories and other giant facilities around the world churning out hundreds of thousands of vehicles a year. The next stages are all about refining these processes and scaling efficient production — and, yes, persuading people to buy the products.

This isn't really Elon's jam. He likes to invent new things, not tweak existing products. This story from The Information put it well when it described why Musk rejected his lieutenants' advice to pursue a cheaper EV, and instead went all-in on artificial intelligence, autonomous vehicles, and robots.

This quote, from a person familiar with the situation, stands out: "I think Elon is just uninterested in making a [Volkswagen] Golf-type car. It just doesn't wake him up in the morning. He was, 'Let somebody else do it.'"

What type of new CEO would Tesla need?

So, who else would do this at Tesla, and what would this mean for the future of the company?

If Musk were to relinquish the CEO role, I think he'd need a Tim Cook-style executive to take the reins.

Cook is a supply chain genius who took over Apple when Steve Jobs died in 2011. At that time, I was a tech reporter at Reuters, and many experts were predicting doom for Apple.

Like Musk, Jobs was a mercurial tech founder who was loved for his visionary inventions and feared for his brutal approach to people management. (Jobs also pulled Apple back from near bankruptcy.)

In 2011, investors just couldn't imagine how Apple might continue to thrive without this creative driving force.

In one way, they were right to worry. Since then, Apple has not launched many truly new and inventive products. The car project failed. The Vision Pro goggles have stumbled out of the gate (and followed Meta's Oculus anyway).

In another way, though, Cook has taken Apple to new heights that were unimaginable 14 years ago. And he did it by taking another solved problem — smartphones — and perfecting it over and over and over again.

Since 2011, Cook has obsessed over minute iPhone product tweaks, redesigned the chips in-house, switched out and negotiated (hard!) with hundreds of suppliers, and carefully evolved one of the world's largest supply chains in the face of pandemics and dictators.

I asked Apple for comment on Monday and didn't get a response. I also emailed Elon and asked him if he wants to spend the next 10-plus years of his life tweaking Tesla's EV operations. I didn't get a reply, not even a poop emoji.

Apple's now a $3 trillion company

The value Cook has added since 2011 is astounding. Late that year, the company was worth about $350 billion. Apple is now valued at $3.2 trillion.

By iterating intensely on an existing product — grinding costs lower and efficiency higher — this CEO has generated almost $3 trillion in shareholder value, and made Apple the most valuable company in the world.

When Apple became the first company to pass $1 trillion in 2018, I edited a story by Mark Gurman that marked this moment. The piece quoted Tony Fadell, who helped Steve Jobs create the iPod. Instead of harping on about Jobs's legacy, Fadell focused mostly on Cook.

"Tim and team have done a masterful job of continuing to develop Steve's vision while bringing operational and environmental excellence to every part of Apple's business to achieve their unheard-of scale while continuing to grow unprecedented margins in the consumer electronics business," Fadell said.

Tesla's '2011 Apple' moment

I think Tesla could be at a "2011 Apple" moment right now.

Musk hasn't died, but his passion for EV manufacturing may have faded.

Like Apple back then, many Tesla investors can't image the company without Musk as CEO. But he could, in theory, step back from day-to-day leadership duties while continuing to work on newer, cutting-edge projects in the background, such as the Optimus robot.

Meanwhile, a Cook-style executive could take the CEO role and start hammering away at the solved problem of Tesla's core EV business. This could also reduce the brand damage done by Musk's political foray.

Apple shows what's possible in a scenario like this: Almost $3 trillion in market value created from basically doing an existing thing better and better.  

I asked Grace Kay, Business Insider's hot-shot Tesla reporter, who might be a good candidate to replace Musk as CEO. She suggested Omead Afshar, a low-profile, mild-mannered executive who once ran a major Tesla manufacturing operation and has become a trusted confidant of the visionary founder.

Sound familiar?

If you want to know more about Omead Afshar, check out Grace's amazing profile. 

• 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."

• By 2030, Deloitte predicted, 1 million skilled workers will be needed to power the semiconductor industry.
• Experts in the sector suggest looking to untapped talent pools and investing in training.
• This article is part of "How AI Is Changing Everything: Supply Chain," a series on innovations in logistics.

For years — since the first "Terminator" movie, really — employees have worried about artificial intelligence replacing them in the workplace.

Though AI implementation could lead to fewer jobs in certain industries, the power-semiconductor and data-center sectors — which manufacture and supply technologies like microchips, integrated circuits, and server farms — are bracing for a different reality: AI could create more jobs than it eliminates.

The reason is simple: demand. Since the semiconductor industry requires highly specialized labor and precision to build microchips and integrated circuits accurately, even the most powerful machines will require humans to ensure they're built and running properly.

As more technology companies embrace AI-powered technologies, the need for skilled engineers and technicians is expected to increase dramatically. In a recent report, Deloitte predicted that by 2030, more than 1 million additional skilled workers would be necessary to meet service demands in the semiconductor industry alone.

Industry experts told Business Insider that this would create opportunities for companies to hire a phalanx of talent focused on programming, quality assurance, and troubleshooting glitches.

Experts said it's also a reason for semiconductor companies to engage in upskilling, or the process of training employees to effectively use AI tools in their roles. This enables them to become more adaptable in the face of AI-driven workplace changes.

For companies to seize these hiring and upskilling opportunities, they must recognize the challenges associated with staffing for such a niche need, Larry Smith, a retired chair of the board of directors at Tokyo Electron, told BI.

Smith and John Akkara, the CEO of the IT staffing company Smoothstack, shared their top strategies for growing and preparing the data-center and semiconductor workforce to best leverage AI.

Cultivate the right skill sets

Even with AI and automation becoming more prevalent in semiconductor and data-center operations, humans are still important to their creation and functioning.

In a recent blog post, Michael Isberto of Colocation America, an on-demand IT infrastructure provider, wrote that humans have key roles in designing and maintaining data centers. And after one is built, technicians are needed to manage and troubleshoot the systems that store, process, and distribute sensitive data.

Smith has more than 35 years of experience in the microchip industry. He said it's important for companies to cultivate the right skill sets to assist with in-house needs like systems management and hardware repair.

"These are the tools of the future — especially when you're talking about AI," said Smith, who served as vice president, president, and chair of the board at Tokyo Electron over the course of 21 years. "Naturally, you want a group of humans who have the skills to rise to the occasion and execute."

Prepare to scale

Sometimes, a data center or semiconductor fabrication facility may need to double or triple its capacity in a matter of weeks. This means that the machines running AI systems need to work faster, longer, and harder and that companies must be ready to scale their human workforces to service these machines.

One organization that enables quick scaling is Uptime Crew, a new subsidiary of Smoothstack.

The company makes talent training plans customized for its clients' needs, Akkara said. The plans are typically designed to get workers hired, trained, and deployed to a job for one of its clients within 10 to 12 weeks.

"The whole idea is that our teams mobilize quickly," Akkara said. "Especially with AI, in the current climate, you need to move fast and be able to work with all the technologies on the market."

The company is nascent and just getting its system off the ground, but it plans to work like this: A semiconductor company wants to expand its AI operations, then goes to Uptime Crew to find and hire specifically skilled workers, like data-center technicians, to get the job done. On the first day of the job, these workers would arrive trained and ready to go.

Consider untapped talent pools

Smith said that with upskilling, companies may find some of the best employees for particular jobs among the retired.

Take the microchip industry. Smith said that the vast majority of semiconductor and robotics operations are run by people who previously worked as military equipment maintenance or field technicians.

Here, the upskilling was seamless: Thanks to their experience troubleshooting problems, crunching codes, and monitoring systems, the former maintenance and field techs were able to step into their new jobs without training delays.

Smith said that he'd love to see military veterans get some of the new and forthcoming AI-focused data-center jobs since these roles require workers with years of experience and highly specialized skill sets, like engineering and quality control.

"The semiconductor industry is important for national security, and those are the kinds of jobs that veterans look for," Smith said. "It seems like too good of a fit not to investigate at the very least."

The staffing company Salute Mission Critical, for example, specializes in staffing and servicing data centers and was cofounded by the veteran Lee Kirby. During a recent podcast interview, Kirby said that the company was established in part to help veterans develop careers in the data-center sector.

Invest in training

Considering the specialized nature of data-center and semiconductor jobs, investing in training is another important factor for companies to think about.

Case in point: Microsoft. This year alone, the company plans to spend $80 billion to build out AI-enabled data centers, Microsoft's vice chair and president, Brad Smith, wrote in a January blog post. At a March event, Smith said Microsoft would pay for 50,000 workers' technical certification exams — for skills related to cloud architecture, AI, and cybersecurity — as part of a training initiative for its South Africa data centers.

Akkara said that when company leaders invest in AI training, they're also investing in the future of the company and its workers.

"You're giving them specialized skills, but you're also giving them new skills that will be valuable today and down the road," Akkara said. "As AI becomes more pervasive, the need for these particular skills is only going to increase."

He added that Uptime Crew constantly evaluates workers' skills through performance reviews and supervisor observation so temporary employees stay motivated to finish their jobs. He said that if certain staffers don't work well for its clients, Uptime Crew replaces them.

In scenarios like this, Uptime Crew clients will also use the service to hire for existing open roles and educate themselves about anticipated skill set needs so that they can strategize for hiring accordingly.

"Technology needs are always changing," Akkara said. "Companies need to be ready for anything."

• UK defense giant BAE Systems says it's about to massively boost its 155mm shell production.
• It's aiming to use new methods to amp up production and reduce the reliance on imports.
• This comes amid worries over the UK's stockpiles, with half a million rounds sent to Ukraine.

BAE Systems says it's about to radically increase its production of 155mm shells, leaning on advances in how it produces munitions.

The UK defense contractor said its new production methods are a "major breakthrough" that will allow it to reach a sixteenfold increase in 155mm shell manufacturing by the summer.

As a result, it says it will not only be able to meet the UK's demand, but will also begin to supply for export by the end of 2026.

The announcement comes amid ongoing anxiety about the UK's stockpiles of key ammunition, having sent Ukraine half a million artillery rounds as of February this year.

It also appears to address a wider global scramble toward reducing dependence on imports and having homegrown access to critical resources and manufacturing capabilities.

BAE Systems' new approach is twofold, affecting the production of both explosives and propellants for shells.

A new formulation for propellants has been developed, it said, reducing the need for nitrocellulose and nitroglycerin, compounds that are in high demand across multiple industries worldwide.

Meanwhile, RDX explosives — the key explosive in 155mm shells — are to be produced through continuous flow processing, a method that's common in manufacturing but has not yet been applied in defense.

It essentially means that shells are made in an uninterrupted process at smaller scale, rather than in large batches, an approach that, in other industries, has resulted in much greater efficiency.

BAE Systems has until now been reliant on the US and France for its supply of RDX.

Trevor Taylor, director of the Defence, Industries & Society Programme at the Royal United Services Institute, outlined the advantages of the new process.

A small-scale process avoids safety risks associated with a single large production plant, Taylor told BI.

He added that the company's ambition is likely to be "to control costs at lower production rates, and to be able to surge production levels by operating more hours when needed without a large labor force that would be idle in less pressing times."

A senior BAE Systems executive with knowledge of the developments told BI that the company plans to sell the technology abroad, promoting other countries' ability to develop sovereign ammunition production.

BAE Systems, like other British defense companies, works in line with the UK Ministry of Defence's priorities and does not sell to the UK's adversaries — meaning that the new system is not likely to end up in Russian hands anytime soon.

The company is the UK's largest defense manufacturer. It won a £2.4 billion ($3.2 billion) government munitions contract in 2020, which was ramped up in 2023 in recognition of the ongoing war in Ukraine.

The company says it's invested £163.5 million, or about $220 million, in new manufacturing sites and tech over the last five years.

• Trump's trade war has increased demand for robotics and automation.
• Robots-as-a-service company Formic said its customers have stepped up their use of robots this year.
• Automation can help companies to save money amid uncertainty.

Automation company Formic said that its customers stepped up their robot usage this year as tariff announcements sent global supply chains into chaos.

Formic automates packing and palletizing — or placing packages on a pallet — for automotive, industrial, food, beverage, and consumer packaged goods companies. It operates on a "robots-as-a-service" model, meaning that customers lease Formic's robots and pay a monthly rate based on how much they use them. Its robots are deployed in more than 100 factories in the US and have stacked and packed more than 1.2 billion products.

Between January and February, Formic's customers increased their robot usage by more than 17% overall, Chief Marketing Officer Shawn Fitzgerald told Business Insider. Its food and beverage customers stepped up their usage by more than 13%. He said the usage numbers seemed particularly notable given that February has fewer business days than the other months of the year.

It's likely that brands were using robots to get ahead of any tariff-related price increases.

President Donald Trump made his first in a series of tariff announcements on February 1, placing tariffs on goods from China, Canada, and Mexico, and closing the de minimis tax loophole.

"This data suggests everyone sat down with each other and said, let's step on the gas as much as we can in February, and let's make as much as we possibly can at the price points we are at right now," Fitzgerald said.

Formic customers' robot usage dipped in March, but the numbers are showing signs of a rebound so far in April, the company said. This month has seen the return of global trade chaos as Trump announced a large set of tariffs on April 2 — which he called "Liberation Day" — then later paused those tariffs except for those on goods from China.

Fitzgerald said that working with Formic helps companies to get more predictability in their costs amid uncertainty.

"If you do unfortunately have to go to overtime, robots love first, second, and third shift and overtime all the same. They do not care," he said.

Using automation to 'fill in some of the gaps'

Formic's customers include Rumiano Cheese Company, a cheese-making and packaging company based in Willows, a small town in the Sacramento Valley of California. Automation is top of mind for the 106-year-old company — even more so as tariffs have posed a threat to their profits this year. Rumiano imports cheeses from Italy and exports products to Mexico, China, and the Dominican Republic through a third party.

Rumiano is installing a Formic robot that can pick up 30-pound boxes of cheese and move them from the production line to pallets to be shipped out to customers. But Formic's robots are just one of several automation solutions Rumiano has explored. It also uses a machine that puts stacks of cheese in the proper place so they can be packaged.

"We've had more AI and robotics conversations in the last two months than we've probably had in the year prior," said Patrick Henson, the vice president of operations at Rumiano.

Employees who previously stacked cheese by hand have been reassigned to other tasks in the facility.

Working with robotics and data partners is key for the small, family-owned company.

"We don't have teams of data scientists or anything like that," David Wolper, director of planning at Rumiano, said. "We are looking to partners to help us grow with AI tools to help us really dig into data so that we can make sure we're spending money on the right things, we're producing the right products, we're doing everything as efficiently as we can to help save costs."

Tariffs have created obvious challenges for brands, but supply chain optimization has been a hot topic for several years. It's an area where robots and software can help, Forrester analyst Paul Miller told BI.

"Since Covid there has been this broad idea about shortening supply chains, improving resilience, improving adaptability, and part of that is bringing manufacturing capacity closer to the customer," Miller said. "If you're trying to bring that manufacturing capacity to California or Germany or Japan, the people are not cheap. You need to use automation to fill in some of the gaps."

Commerce Secretary Howard Lutnick alluded to this idea in several TV appearances he made after Trump announced his tariff plans in April.

On CNBC, he said US factories are "going to see the greatest surge in training for what we call tradecraft — teaching people how to be robotics, mechanics, engineers and electricians for high tech factories."

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• US businesses are pressuring Chinese suppliers to cut prices to mitigate Trump's tariffs on China.
• Supply chain experts say Chinese manufacturers have smaller margins to give.
• After heated back-and-forth retaliations, the US tariffs on China stand at 145% as of April 10.

To avoid steep price hikes for consumers, US businesses are pressuring their Chinese suppliers to lower prices after President Donald Trump imposed massive tariffs.

Those attempts will likely fail, production management companies and supply chain experts told Business Insider.

"If you already reduced your pricing in the past for your US clients, you probably don't have much space to do it again and again," said Jonathan Chitayat, CEO of Genimex Group, a contract manufacturing company. "You can do it for an order or two, but the next time your customer asks you for a price, you are going to work on the reality that you have to be a profitable business and you can't continue losing money."

Genimex Group helps US companies engineer and manage manufacturing for electronics and kitchenware, which often means working with overseas suppliers in Asia. Chitayat said that a large part of the job now is negotiating with factories to mitigate the tariffs. Still, because that possibility is shrinking, many US clients have already raised their retail prices.

"Everyone's already under pressure and has been asked that question before," said Chitayat. "There are no subsidies that we're aware of that the government in China is giving to manufacturers, so they mostly don't or have very, very little margins to give."

Trump has a history of imposing tariffs on China since his first presidency in 2016. The manufacturing hub also became his main target during his "Liberation Day" announcements, during which he said China had a 67% tariff on the US, among several other figures representing other countries' duties on the US that could not be found in past trade documents.

Despite announcing on Wednesday that his tariff policy would be temporarily suspended for 90 days on more than 75 trading partners who did not respond with retaliatory measures, Trump said on Thursday that a 10% blanket tariff on all countries still stands and that tariffs on China total 145%.

Trump wrote on Truth Social that these tariffs are "effective immediately" and "based on the lack of respect that China has shown to the World's Markets."

China retaliated against the initial US tariffs with an 84% counter tariff and raised the amount to 125% on April 11, calling the US a "joke." The Ministry of Finance in China added that, given the price tag, there is no longer any "market acceptance for US goods exported to China."

Tariff burden will fall on consumers

"There has historically been this pressure to who's going to eat the tariff, and I don't think there's much room to move on that now," Willy C. Shih, Professor of Management Practice in Business Administration at Harvard Business School, told Business Insider. "China is already hyper-competitive."

Shih said that if the Chinese Yuan depreciates, that could help absorb some of the tariff shock. However, that would be insufficient to keep costs down for many products like electrical equipment, which already faced Section 301 tariffs before the most recent "reciprocal" tariffs enacted under the International Emergency Economic Powers Act.

He said many of these products, such as liquid crystal flat panel displays for televisions, were never made in the US in the first place.

"You can distribute parts of the tariff among all the parties in the supply chain, but these numbers are so large now that they're going to have to be passed on to consumers," Shih added.

Some supply chain experts have also told BI that China's internal economic issues have affected its ability to mitigate external shocks, which could harm both countries.

"Chinese manufacturing firms have faced declining margins in part due to falling domestic demand," Sara Hsu, clinical associate professor of supply chain management at the University of Tennessee, told BI, "so there is already weakness in this sector from last year."

Andrew Collier, Senior Fellow at the Mossavar-Rahmani Center for Business and Government of the Harvard Kennedy School, told BI that due to the collapse of China's property market and the subsequent loss of property revenue for local governments, there's little room for Xi Jinping, the Chinese president, to prop up manufacturers.

"Xi faces some domestic pressure from unemployed workers, disgruntled property owners, and small businesses selling goods to the US," said Collier. "The political pressure on Trump in a democracy is likely to be much higher once people realize how bad the economy and markets are."

• Emily Ley, owner of Simplified, sued Trump over tariffs on China that are threatening her business.
• Ley's lawsuit challenges Trump's use of the International Emergency Economic Powers Act.
• Simplified faces potential closure due to tariffs, risking up to $1 million in costs this year.

Until about a month ago, Emily Ley's social media posts consisted almost entirely of delicious recipes and photos of idyllic time spent with her family.

But since President Donald Trump began to impose tariffs Ley says would end her American Dream, she suddenly found herself at the forefront of a fight impacting the livelihoods of millions.

"I was seeing so much misinformation and confusion about what tariffs are, who pays the tariffs, and how tariffs impact employees and businesses and consumers," Ley told Business Insider, "so just a couple weeks ago, I decided I have got to speak up and say something."

Aside from being a published cookbook author, an influencer with more than 230,000 followers, and the mother of two young children, Ley is also the CEO of Simplified, a small stationary company in Florida run by a team of nine women. The company relies on Chinese manufacturers to produce its signature planners for busy women — and Trump's tariffs could shut her business down.

"I posted on Instagram just a couple of detailed slides about what the tariffs are, how it has impacted Simplified, and how much money we have paid in tariffs over the last few years — and it quickly went viral," said Ley. "I have the facts because I'm the one signing the checks."

A constitutional challenge to Trump's tariffs

Ley's posts led to a call with the New Civil Liberties Alliance, a Libertarian legal group. The group now represents her as a stakeholder in a lawsuit against Trump, Homeland Security Secretary Kristi Noem, and the Customs and Border Protection Acting Commissioner Peter R. Flores.

The lawsuit filed at the Northern District of Florida states that Trump has misused the International Emergency Economic Powers Act to impose tariffs on all exports from China, as the law was meant for "sanctions as a rapid response to international emergencies," which "does not allow a president to impose tariffs on the American people."

The IEEPA, a 1970s law that grants the president sweeping powers only during an economic emergency, was invoked by Trump to justify his duties on almost all other countries. So if Ley's case succeeds, it could undo all of his tariffs.

"The constitutional power 'to lay and collect Taxes, Duties, Imposts and Excises' and 'to regulate commerce with foreign Nations' belongs to Congress," said John Vecchione, senior litigation counsel of NCLA, in a statement. "The Administration's actions followed none of these constitutional commands."

After rounds of retaliations, the US tariffs on China stand at 145%, while China's counter-tariffs on the US increased to 125% as of April 11.

The White House did not respond to a request for comment.

Ley plans to 'go down fighting'

Ley started making planners in 2012 after she had her first child and realized that there were no notebooks out there that met her needs as a woman juggling many tasks.

Her first instinct was to work with a manufacturer close to home. However, it cost $38 each to make the most basic planner domestically, so even though she priced them at $50 each and sold out an initial run, she was left with no profits after deducting other fees and business expenses from the balance.

After a year of looking for an affordable US manufacturer, Ley began working with factories with ethics certifications in Shenzhen, a southern Chinese city, in 2013. Simplified now has more than 50 different planner designs, selling between $20 and $60 each. The production cost of each planner is around 25% of the price listed on the Simplified website.

"We were only able to grow because China has the infrastructure to do all of the things we wanted to do with our products, like having gold binding, gold corners, pockets and stickers, and beautiful keepsake boxes for packaging," said Ley. "That infrastructure just doesn't exist here."

Since Trump's first round of tariffs on China in 2017, Simplified has been paying 25% in tariffs, which, as of January 1 this year, cost the business just under $1.2 million over 8 years.

Now, with the prospect of a 145% tariff, the business would be paying anywhere between $830,000 and a million dollars this year alone. Ley would be looking at the "scary prospect" of cutting staff, hiking prices, or shutting her doors if she couldn't find a domestic manufacturer capable of making the same products.

"I did not have it on my Bingo card for 2025 to sue the president, but I am proud to stand up as a small-business owner, as a women-owned business," said Ley. "If this is going to be the end for my company, I'm going to go down fighting."

• Trucking industry leaders want to minimize empty-trailer trips to improve costs and efficiency.
• Uber Freight is using AI on its platform to provide trucking companies with more optimized routes.
• This article is part of "How AI Is Changing Everything: Supply Chain," a series on innovations in logistics.

Moving air has become a nuisance for the trucking industry in recent years.

A recent industry report estimated that at any given moment, roughly 35% of all trucks on US freeways were empty of goods.

For example, a truck driver might secure a load to haul from Long Beach, California, to Chicago, but once they drop off the load, they'll head home with a trailer full of, well, nothing but air.

This problem isn't just about inefficiency but also cost. Wasted time and fuel mean extra expenses for shippers, which eventually leads to higher prices for consumers. The issue is also related to sustainability: Additional carbon emissions and inevitable road congestion undoubtedly affect our environment.

Uber Freight — a business unit of Uber Technologies — has set out to solve this problem and do it almost exclusively with artificial intelligence. It works a lot like the Uber app does on a smartphone.

With the Uber app, riders are the users and request transport from all available drivers. With Uber Freight, truckers and trucking companies are the users and they can use it to line up different loads so their trucks aren't running empty for more than a few hundred miles a day.

This way, instead of going from Long Beach to Chicago and back, a truck might bring new loads from Chicago to New Orleans, New Orleans to Houston, and Houston to Phoenix before heading home.

The technology behind this platform uses AI to optimize shipping routes, Uber Freight CEO Lior Ron told Business Insider. He said that this technology could cut a truck's empty rate to as low as 10%.

"The ultimate goal is to make every mile of a trip a paid mile and make it worth everybody's while that these guys are out there making deliveries," Ron said. "We can't achieve that yet, but we sure can come a lot closer."

How Uber uses machine learning to create more optimized truck routes

Since the trucking-specific Uber Freight platform launched in 2023, it has used machine learning to pioneer an algorithm that ensures carriers receive up-front guaranteed pricing for trucking and freight.

This algorithm has been used by thousands of companies, including 200 of the Fortune 500s, Ron said. He added that the system had moved more than $20 billion in freight.

"By looking at hundreds of parameters, we've been able to make the model accurate enough that it has removed all the friction and back-and-forths of trying to estimate the price of trucking," Ron said. Those parameters include weather and traffic conditions and road closures.

Uber Freight is also using machine learning to address vehicle routing, a complex issue that involves determining the most efficient route for a vehicle to deliver goods to a set of locations. Here, the issue is not so much avoiding traffic as routing trucks so that their trailers are full more often than not.

By algorithmically designing the optimal route for the truck driver, the company has been able to reduce empty miles by between 10% and 15%, Ron said. This benefits vendors, trucking companies, drivers, and consumers since lower transport costs typically translate to lower product costs.

Freddie Jimenez, the owner of F&J Logistics Inc. in Kansas City, Missouri, said that Uber Freight makes it easier for him to plan his day, find loads that fit his schedule, and keep his wheels moving.

"As a driver, the most important thing is staying on the move. I am not wasting hours waiting or worrying about where the next load is coming from," Jimenez told BI.

Why more efficient trucking matters

Uber Freight's technology is part of a broader push among logistics companies to use AI to gain a competitive advantage, said Jose Reyes, a senior director and analyst for Gartner's supply chain division.

"AI systems can analyze weather, traffic, and road conditions to suggest optimal routes in real-time," Reyes told BI in an email. "This is a tremendous benefit in not only efficiency but with driver safety, load planning, and dispatching. This application of AI can significantly reduce manual work."

Chris Caplice, the executive director of the MIT Center for Transportation and Logistics, hosted a webinar on AI in logistics with Ron late last year. There, Caplice said Uber Freight's technology is an example of innovations in the trucking industry.

"By being trained continuously, the models will learn better routing policies automatically; if a policy shifts, for example, the model will pick up on it, eliminating the need for specialty algorithms," Caplice said during the event. He added: "AI models generalize well to solve previously unseen problems such as vehicle capacities."

Leveraging agentic AI

Uber Freight is also deploying agentic AI to improve efficiency.

This flavor of AI hinges on the ability to use human language to mimic human interactions.

Uber Freight deploys the technology in a customer support center and uses it as the first line of defense against complaints.

Ron said that by dispatching canned messages to certain inquiries, the company expected to reduce its waiting time to 30 seconds from five minutes.

These shortened wait times can help with efficiency by minimizing the time drivers spend dealing with customer service for simple tasks, like receiving a link on their smartphone or a document.

• Tariffs are jeopardizing the only single-origin Mexican chiles to become available in the US.
• Chiles grown in Mexico don't taste the same once removed from their native environment.
• Celebrity chef Rick Bayless says the restaurant industry now "lives in fear" of potential tariffs.

Sweet, fruity, and savory, a shipment of single-origin Mexican chiles previously unavailable in the US is now sitting at the Southern border. But thanks to Trump's on-again, off-again tariffs, they may never make it to your spice racks.

For more than two years, Ethan Frisch, CEO of Burlap & Barrel, a public benefit corporation, has been trying to get a batch of heirloom chiles known for their intense flavors and health benefits from a farm in Querétaro, Guanajuato, to consumers in the US.

After losing the initial shipment of chiles to a drought and an insect infestation in 2023, Frisch spent the next year securing a professional processor, making research trips, and getting the farm set up to become an exporter instead of going through a third party.

After a successful growing season in 2024, around 3,000 pounds of processed and ground chiles are finally ready for American dinner tables, only to face the prospects of a 25% tariff at the border, which could erase profits or ruin the goal of making them accessible to ordinary consumers.

"There's been a lot of stop and start," said Frisch, recalling conversations with his team after the briefly paused tariffs returned early March. "We were like 'let's stall, the tariffs are in place, don't get this across the border right now.' And then a couple days later the tariffs are gone and we're like 'go, go hurry, let's get them across before the tariffs come back.'"

"This is a spice we would want to be somebody's daily use spice in their home kitchen, but with a 25% tariff on it, it really changes the price calculation, and we don't even know if we would be able to sell the full quantity that we got at that higher price," he added.

Failing to sell a significant quantity of chiles this year would mean that this project could no longer sustain another year to build a market. Even if it does sell at a higher price point, households of average income would likely be priced out given current consumer sentiment.

A rich culinary history of chiles in Mexico

Whereas Americans may see chiles as a monolith, these spicy fruits have different names and uses in Mexico depending on their harvest time, color, thickness, moisture, and drying method.

During Frisch's trip to Oaxaca to study the history of chiles, he learned that not only are humans evolutionarily drawn to spice, modern medicine is just beginning to see the health benefits of capsaicin compounds in chiles on inflammation, muscle recovery, and arthritis — benefits that have long been understood in traditional practices in Central America.

The specific chiles Frisch spent years trying to import are guajillo, ancho, and pasilla. While the former is bright in taste and light in color, the latter two have the texture of raisins and robust flavors that range from dried tomatoes to dark chocolate.

Though chiles by these names are also bred and grown on some specialty farms in the US, this shipment would be the only native heirloom chiles of these types grown in Mexico by an artisan farmer to enter the US.

"Each type of chile is unique because these plants are highly adaptable and could change in dramatic ways in terms of taste and heat in every region it has spread to across the world," Frisch said. "That adaptability almost represents the movements of people."

Rick Bayless, an award-winning chef who runs Michelin-starred restaurants specializing in Mexican cuisine, is among the many waiting for these chiles to cross the border.

"In the past, everyone was connected through food to different people, but we've really eroded a lot of that," Bayless said. "My excitement about single-origin food like these chiles has a lot to do with the fact that I feel like they're helping me and my customers get back to that direct connection."

Bayless added that he had gone the extra mile in the past to have the same chile seeds brought to the US and cultivated, yet the flavor just wasn't the same — and it wasn't as good. If tariffs go through, it could impede access to a range of unique products, and that might mean taking things off the menu for him.

"The importers, the distributors, and the restaurant chefs that I talk to all the time — everybody just lives in fear because we have no idea what would happen," Bayless said. "If you have some steel and it sits in a warehouse for several years, it's still fine, but not food products."

• Some businesses say moving supply chains out of China more costly than absorbing Trump's tariffs.
• Companies are negotiating with manufacturers to keep costs down and reduce consumer pain.
• A supply chain expert said uncertainty in policies may pose bigger challenges in business planning.

The Trump administration's tariffs on goods imported from China have left businesses wondering if they should move their supply chains elsewhere.

But some say the cost of finding new suppliers and relocating production isn't feasible.

"It can be way more expensive to move your supply chain than to eat the tariff," said Michael Wieder, cofounder and CMO of Lalo, a baby product brand with most of its supply chain in China, told Business Insider. "We don't want to react on things that are going to end up being a waste of money and a waste of time."

Wieder said products for children tend to be more regulated for safety reasons, so he would not be able to quickly replace established factories and engineers that meet the requirements.

"We're going to work with our suppliers to negotiate our costs down where we can to make sure it doesn't impact our business. But the tariffs are inflationary, there's no doubt about it," he said.

Trump issued an executive order on February 1 that any products from the PRC, as outlined in the Federal Register notice, will legally face an extra 10% duty on top of the regular rate. He cited China's failure "to stem the ultimate source of many illicit drugs distributed in the United States" as a reason for the tariff hike.

While the majority of drugs seized at the border come from Mexico, the US International Trade Commission estimated in a 2019 briefing that 97 percent of fentanyl in the US is manufactured using precursor chemicals from China.

While former President Joe Biden maintained most of the tariffs on Chinese imports that Trump implemented during his first administration and increased tariffs up to 100% on targeted products like electric vehicles and solar panels, he also maintained exemptions for categories of healthcare items like wheelchairs and baby products. These exemptions are, however, not mentioned in Trump's latest executive order on China.

"We're doing everything in our power to urge the administration to keep those exemptions," said Wieder, "It's not right to drive costs up on the things that parents need to buy for their children and for their babies. But we have our blinders on, we don't control what's going on in Washington."

Other businesses say they can't move their supply chain out of China without discontinuing key products, and even then, the move couldn't happen anytime soon.

Jimmy Zollo, founder of adaptive wear brand Joe&Bella, said many of their highly specialized products, like magnetized and dual-track zippers that could be extended to the ankle, simply could not be sourced outside China. This could impact their main customer base: people living with cognitive changes and limited mobility.

"Changing a manufacturer isn't just like packing up a suitcase and moving on over," said Zollo, "It'll probably take several months of back and forth if they can even find the right fabric, zipper, and dye — compound that with the fact that there are countless American businesses who are doing what we're doing, which is trying to find see what other potential partners exist out there in the market."

Aside from ordering more of their more popular products at the end of 2024, Zollo is now negotiating costs with manufacturers to reduce the impacts of the tariff because his customers likely don't have the level of disposable income that would allow them to pay higher prices.

"At this point, there's risk in staying, there's risk in going, there's risk in not doing anything," he added.

Who will pay the price

Consumers likely won't be receiving the full impact of the tariffs because every stakeholder along the supply chain absorbs a portion of the shock, from the supplier, manufacturer, transporter, to the final retailer, said Yossi Sheffi, director of the MIT Center for Transportation and Logistics.

However, the speed at which policies are being rolled out and retracted may pose a bigger challenge, Sheffi said.

"The main problem is nobody knows what to do because one day we have 25 percent on Mexico and Canada, and then the next day it's paused for a month," said Sheffi, "Things are being put on and off seemingly haphazardly, so it's hard to plan. What business hates more than anything is uncertainty."

Sheffi added the cost of moving a supply chain could be "prohibitive," and the business strategy now is to wait and see.

A source familiar with the situation at US Customs and Border Protection said they do not know whether previously tariff-exempt imports from China remain free of duties. Due to the large number of queries they have received, they are still working through details. The Office of the US Trade Representative did not respond to requests for comment.

• Chinese firms that are setting up operations in countries outside China could face more scrutiny.
• Governments could start focusing on the ownership of companies rather than where goods come from.
• This would mean Chinese firms working outside China to avoid tariffs wouldn't be spared from levies.

America could lock out Chinese companies that use other countries to circumvent tariffs, a top think-tank chief said.

Companies — including Chinese ones — have been shifting some production out of China. They're trying to diversify their supply chains, which have been under more pressure in recent years thanks to the first Trump administration's tariffs and Beijing's disruptive pandemic lockdowns.

"I think there will be a lot of focus on if China's using other countries for transshipment or if it's Chinese companies that are going into another country, you're going to see a new form of protectionism where we focus on rules of ownership, not rules of origin," Michael Froman, the president of the US-based Council on Foreign Relations, said at a panel on Thursday at the World Economic Forum in Davos, Switzerland.

Trade is traditionally viewed based on the rules of origin, or which country a product came from. This is also how tariffs are generally applied.

But Froman, who served as the US trade representative from June 2013 to January 2017 under the Obama administration, said governments could soon start to look at trade in a new way: through the lens of company ownership. This change would hit Chinese companies that are using transshipment hubs to avoid punitive measures.

"So it doesn't matter that it's coming from Mexico or Indonesia. If it's a Chinese company and they're violating rules, or they're trying to circumvent the tariffs, they may well find themselves blocked from the United States," Froman said.

In his first week in office, President Donald Trump said a 10% tariff on Chinese goods could come as soon as next month. While on the campaign trail, he threatened to put much higher tariffs — 60% — on Chinese goods.

Mexico, an auto hub, is becoming a prime location for Chinese manufacturers to relocate to because the US is a key market for vehicles and parts.

In 2023, Chinese companies announced $2.7 billion worth of investments in Mexico's auto sector, according to an analysis from research provider Rhodium Group. This is nearly three-quarters of Chinese investment into Mexico and is dominated by vehicle-parts manufacturers.

The West is concerned about Chinese overcapacity

The West has slammed China's overproduction of goods that have poured into global markets and hurt their economies.

"China is flooding strategic sectors with supply that's well beyond what global demand can plausibly absorb, and therefore wiping out the competition," said Daleep Singh, then a deputy national security advisor at the White House, in October.

At the same time, China is framing the West's concerns about overcapacity as protectionism and as moves to curtail the country's economic development.

"The US and Europe basically maintained an open rules-based system, but the rest of the world greatly benefited from including China," Froman said.

"But all throughout that period, that benign international environment, we were warning China that if they continue to engage in protectionism, close their market to foreign investment, subsidize their industries at the expense of other countries, that benign international environment would disappear — and that's exactly what's happened," he said.

• For years, Tim Cook has overseen the development of Apple's supply chain in China.
• The risk of tariffs on China from Donald Trump requires a complex balancing act from Cook.
• Jamie MacEwan, an analyst, estimates that "almost half of Apple's revenue is exposed to China."

Tim Cook faces an unenviable task this year: keeping a tough-on-China president onside while continuing to lean on the country for Apple's complex supply chain.

The Silicon Valley giant has spent years building a vast supply chain network in China under the leadership of Cook, who was first tasked by Steve Jobs in 1997 with devising a cost-cutting outsourcing plan when Apple was on the brink of bankruptcy.

From Jiangsu in the east to Sichuan in the west, Foxconn, Luxshare, Pegatron, and others have played pivotal roles in helping Apple generate over $1.8 trillion in net sales this decade alone by serving as the manufacturing conveyor belt for everything from iPhones to Macs.

However, Apple's ability to maintain its most important manufacturing network could now depend on how effectively Cook negotiates with President-elect Donald Trump — while appeasing rival powers in Beijing, in whose hands Apple's supply chain largely sits.

Trump has signaled a return to the trade war that defined his first term by threatening to slap new tariffs on China. Such a move risks adding new costs to Apple's supply chain and could push it further from the country it has depended on to turn out iPhones for decades.

"It's extremely complicated because of the depth of the dependence on Chinese manufacturing competence," Kevin O'Marah, a supply chain expert and cofounder of research firm Zero100, told Business Insider.

What lies ahead for Cook then is a delicate balancing act: reckoning with Trump's political gameplan while protecting the supply chain empire he has staked Apple's fortunes on.

A high-stakes balancing act

Cook seems acutely aware of the dilemma, which is why he's been busy courting both sides.

Over three trips to China this year, the Apple CEO has met with top leaders like Chinese Premier Li Qiang, visited local suppliers, and attended an industry conference in Beijing. He has done all this while singing Trump's praises.

In November, Cook congratulated Trump on his election victory with a post on X that said, "we look forward to engaging" to ensure the US continues its technology leadership. He turned up at Trump's Mar-a-Lago resort a month later, but only after visiting China weeks earlier.

Jamie MacEwan, senior analyst at Enders Analysis, told BI that Cook's ability to continue getting what it wants out of China will "take a huge amount of public diplomacy from Apple leadership" as they "navigate increasingly choppy geopolitical waters."

Pulling off this diplomatic feat won't come easy. Apple has wrapped up its vast fortune in a sprawling supply chain in China that will prove difficult to untangle in the near term. While Apple generated $66.9 billion of its $391 billion in net sales from the Greater China region in its last fiscal year, MacEwan estimates that "almost half of Apple's revenue is exposed to China through direct sales and the supply chain," making it tough to leave China behind.

Apple has, of course, slowly been making efforts to diversify its supply chain. In the six months to September, Apple shipped almost $6 billion worth of iPhones made in India, according to Bloomberg, up a third from the same period last year.

Earlier this month, meanwhile, it emerged Apple would begin producing AirPods from a new factory in India for the first time, starting this year, and overseen by a Foxconn unit. The number of vendors in Vietnam supplying Apple has steadily increased, too.

Easier said than done

Though Apple has been taking these steps, experts believe that China remains vital to Apple's operations for a key reason: it's not yet possible to replicate the scale of its operations in the country elsewhere.

O'Marah said that much of Apple's success in China has come down to the "depth of the engineering in the supply chain" established by Cook.

The company has established a deep relationship with suppliers that involves the development of "millions and millions of identical pieces of machinery," O'Marah said, which comprise a "very deep and very complex bill of materials and componentry."

Simply getting up and leaving if new tariffs hit, then, is not an option. "India is picking up quite a bit of opportunity, but it'll take them a decade to get there," O'Marah said. "They don't have the same amount of manufacturing expertise, and to transfer that in takes a lot of time."

Dipanjan Chatterjee, a principal analyst at Forrester, agrees. He told BI that although "there is no way yet to tell how the proposed tariffs on China will play out," boosting India's manufacturing volume in the face of tough new taxes on China won't be straightforward.

"The devil is in the details," he said. "For example, India will have to be able to scale up rapidly to accommodate that kind of additional volume — not an easy task."

How Apple will proceed remains to be seen. According to a Reuters report, China's commerce minister Wang Wentao told Cook that Apple is "welcome to continue deepening its presence in the Chinese market."

Cook's growing closeness with Trump over the years may offer him some confidence. In 2019, when Trump planned a 10% tariff on Chinese imports, Cook successfully negotiated exemptions with the president and ensured Apple's supply chain would stay safe.

O'Marah also notes that tariffs are based on political rather than economic logic, so an almost 40% tariff on US imports from China next year — like the one predicted in a poll of economists conducted by Reuters — could "pop up and disappear overnight."

That said, the situation remains immensely complex for Cook.

MacEwan notes that Trump's future tariffs remain a "real wild card." A bad-case scenario would "increase the impetus for Apple to reshore more manufacturing out of China, but there is a limit" to what can be done. There is a risk that Beijing could retaliate too, he said.

"This isn't like Walmart sourcing more goods from India," MacEwan said. "Each iPhone is the result of a complex and highly integrated and optimized supply chain."

• SolidIntel CEO advises clients on derisking supply chains amid tariff concerns.
• China's dominance in rare earth minerals poses risks to tech supply chains.
• Friend-shoring and nearshoring are strategies to enhance national security and tech resilience.

Megan Reiss has been very busy since the election. The CEO and founder of SolidIntel, a D.C.-based supply chain advisory firm, has been fielding calls from current and prospective clients looking to understand what Trump's second term could mean for their manufacturing, supply, raw materials, foundry, and businesses across sectors.

SolidIntel's clients also want to know how to derisk their operations as talk of tariffs sends markets into a volatile turn.

"People concerned about tariffs are very interested in moving their supply chains out of China as quickly as possible because they see it as the potential for everything to get really expensive, really quickly," Reiss told Business Insider.

The rare earth minerals and raw materials underpinning the AI boom and its countless clusters of chips may soon be in the spotlight because of where they're produced. Though President-elect Trump's Monday post named Mexico and Canada, all eyes are on China.

"Our technology is dependent on these rare earth minerals. China has a lot of opportunity to turn off the spigot," Reiss said.

Friend shoring to allies

Friend shoring, or moving supply chain, manufacturing, and operations to non-adversarial countries to have continuity, is one step to derisking tech's supply chain.

The potential for export controls and sanctions are also top of mind for SolidIntel's rare earth mineral clients. These raw materials serve as the building blocks for wafters, and semiconductors that power advanced AI chips. The vast majority of these minerals are commercially mined in China or quarries owned by Chinese companies.

In 2023, the U.S. imported more than 95% of rare earth compounds and minerals from China, Malaysia, Estonia, and Japan, according to the U.S. Department of the Interior.

Nearshoring and friend-shoring manufacturing and vital supply chains away from China are also important for national security and could bolster a sovereign tech sector. The near-term investment is difficult but ultimately more beneficial in the long term.

Since 2023, SolidIntel, which uses generative AI and machine learning to identify supply chain risks, has helped companies track how bad actors end up in supply chains and connects companies with compliant suppliers.

"The more these supply chains are not hung over our head, and we make national security choices that are in the best interest of the U.S., the less afraid we are that an adversary is going to try to kill our commercial sector, that's a good thing," Reiss said.

There are closer to home alternatives that could become more viable depending on the incoming administration's policies, how relations with China play out, and if Trump makes good on his tariffs talk.

"My fear is not that we will not find alternative sources because there are a lot of rare earth minerals, and they're not just in the U.S.; they're in friendly and allied countries. I'm worried about us doing it fast enough. It can take a decade or more to bring a mine online, and it can't take that long in this case," Reiss said.

Create redundancy in manufacturing

To derisk the supply chain, create redundancy. In other words, reducing parts of supply chains that are dependent on one country is a way to cut down on risks and diversify manufacturers' options.

"If I were a manufacturer and I had a couple of chokepoints in my supply, say two of three, difficult-to-source parts that are only produced in a couple of countries, you would ideally want to have production lines in multiple countries," Reiss said.

Though streamlining production to fewer or one country can be cheaper and more efficient, it only works until something goes wrong she said.

Regulation of the supply chain may increase, but tech companies and their suppliers could find solutions in data. "Technology cannot do it unto itself, because you can only rely on the data you can get to understand the whole length of the supply chain. It's about open-sourced intelligence and closed data sets, " Reiss said.

"It's not just 'is this a foreign manufacturer, it's 'what are the foreign ownership control and influence risks in partnering with a company or in having a certain investor," Reiss said. "There's a lot more to it that people are just starting to build out their understanding of."