They all want the war to stop, not the tariffs to fall.
Across the factory floors and shipping docks of southern China, a war fought far away has become the defining pressure of daily commerce. The conflict around the Strait of Hormuz — not the long-anticipated tariff negotiations between Washington and Beijing — has emerged as the more immediate threat to Chinese exporters, choking the arteries through which their goods must flow. As the Trump-Xi summit approaches, the question on the minds of those who make and move things is not about trade policy, but about whether the sea lanes will reopen and whether the world's supply chains can hold.
- Delivery times from China to Europe have stretched from 30-40 days to over 50, forcing exporters like Shenzhen helmet-maker Bryan Zheng to absorb the punishing cost of air freight just to keep orders alive.
- Port congestion in Shanghai and Ningbo, spiking raw material costs, and blocked rail routes for goods classified as dual-use equipment have compounded into a crisis that strategic repositioning cannot solve.
- An index tracking Chinese input costs for materials, fuel, and power surged 3.5 percent year-on-year in April — a sharp acceleration that signals the war's economic pressure is deepening, not stabilizing.
- Exporters who once worried about tariffs have quietly shifted their anxiety: when analysts ask about the Trump-Xi summit, the conversation turns immediately to the war, the strait, and how long the disruption will last.
- Some companies are already drafting contingency plans to downsize operations in the second half of the year, treating prolonged conflict not as a risk scenario but as a likely reality to plan around.
Bryan Zheng runs a helmet company in Shenzhen. The container that once reached Europe in thirty to forty days now takes fifty. He has started paying for air freight — expensive, urgent — because the sea route through the Strait of Hormuz has become too slow and too uncertain. This, not tariffs, is what keeps Chinese exporters awake.
For the past year, these businesses have been in constant motion — diversifying supply chains, relocating factories, opening new markets — absorbing the shock of American tariffs and surviving. But the Iran war has introduced a different kind of pressure. Shipping lanes are contested. Energy prices have spiked. In April, an index measuring Chinese input costs jumped 3.5 percent from a year earlier, a sharp acceleration from March's 0.8 percent rise.
Wang Dan, who directs China operations for Eurasia Group, has noticed a striking shift. When she asks exporters about the upcoming Trump-Xi summit, almost no one mentions tariffs. The conversation turns immediately to the war: How long will it last? When will the strait reopen? Some companies have already sketched plans to shrink operations in the second half of the year if hostilities persist.
The mathematics are brutal. Port congestion across major Asian hubs has sent freight rates climbing. Rail freight — faster and cheaper — is blocked for certain goods. Zheng's smart helmets have been classified as sensitive dual-use equipment because of conflict zones along the overland routes. There is no good option, only expensive ones and impossible ones.
Zheng sees the distinction clearly: higher tariffs can be absorbed by raising prices. But a war that makes raw materials scarce and shipping unpredictable forces a choice between slow delivery and ruinous expense — that is something else entirely. Supply chain consultant Cameron Johnson frames it in broader terms: the war is a systemic shock rippling through oil derivatives, fertilizers, and every supply chain that depends on them. When the two leaders meet, they will likely reaffirm their shared interest in reopening the strait — but maritime standoffs rarely resolve quickly. For Chinese exporters, the waiting continues, and the costs keep climbing.
The shipping container that once took thirty to forty days to reach Europe now takes fifty. Bryan Zheng, who runs a helmet company in Shenzhen, has watched his supply lines fracture under the weight of a war he did not start. The Strait of Hormuz, through which so much of the world's commerce flows, has become a chokepoint. He has begun paying for air freight—expensive, urgent, a tax on survival—because the sea route has become too slow, too uncertain. This is the crisis that keeps Chinese exporters awake now, not tariffs.
For the past year, these businesses have been in constant motion. They diversified their supply chains, moved factories, hunted for new markets in the Middle East and elsewhere, all while absorbing the shock of American tariffs that upended their models. They adapted. They survived. But the Iran war has introduced a different kind of pressure—one that no amount of strategic repositioning can solve. The conflict has choked the arteries of global trade. Shipping lanes are contested. Energy prices have spiked. Raw material costs have surged. In April, an index measuring input costs for materials, fuel, and power in China jumped 3.5 percent from a year earlier, a sharp acceleration from the 0.8 percent rise in March.
Wang Dan, who directs China operations for Eurasia Group and speaks regularly with exporters across the country, has noticed a striking shift in what worries them. When she asks about the upcoming Trump-Xi summit, barely anyone mentions tariffs anymore. The conversation turns immediately to the war. How long will it last? When will the strait reopen? What happens to orders from overseas if the conflict drags on? Some companies have already sketched contingency plans to shrink their operations in the second half of the year if the hostilities persist.
The mathematics are brutal. Port congestion across Shanghai, Ningbo, and other Asian hubs has sent freight rates climbing. Labor shortages and capacity constraints are slowing containers on the routes to Europe and the Mediterranean. Rail freight, which would be faster and cheaper, is blocked for certain goods—Zheng's smart helmets, for instance, have been classified as sensitive dual-use equipment because of the active conflict zones along the overland routes. There is no good option, only expensive ones and impossible ones.
Zheng himself sees the distinction clearly. Higher tariffs, he notes, can be absorbed. You raise prices, you pass the cost to consumers, and business continues. But a war that strangles supply chains, that makes raw materials scarce and shipping unpredictable, that forces you to choose between slow delivery and ruinous expense—that is something else entirely. A peace deal that reopened the strait would be transformative, he said, though he harbors no illusions that any ceasefire brokered at the Trump-Xi summit would necessarily hold.
Cameron Johnson, a supply chain consultant based in Shanghai, frames it in broader terms. The war is not a trade issue. It is a systemic shock rippling through oil derivatives, fertilizers, raw materials, and every supply chain that depends on them. It is, he said, a global problem of a different magnitude than tariffs. When the two leaders meet later this week, they will almost certainly reaffirm their shared interest in reopening the strait and restoring regional stability. But maritime standoffs and stop-and-go negotiations are likely to persist. For Chinese exporters, the waiting continues—and the costs keep climbing.
Citas Notables
They all want the war to stop. Many of them barely mentioned tariffs when asked about their expectations from the summit.— Wang Dan, China director at Eurasia Group
A peace deal reopening the strait would be a huge net positive for everyone, though any ceasefire from this summit could prove short-lived.— Bryan Zheng, founder and CEO of Livall Tech
Companies are much more worried about this war because it's screwing everything up—all the supply chains, raw materials, oil derivatives, and fertilizers. This is a whole global thing, a much bigger issue than tariffs.— Cameron Johnson, senior partner at Tidalwave Solutions
La Conversación del Hearth Otra perspectiva de la historia
Why has the Iran war become a bigger concern than tariffs for these exporters?
Because tariffs are a cost you can manage—you adjust prices, you find new markets. But a war that blocks shipping lanes and makes raw materials scarce? That's not something you can price your way out of. It breaks the entire system.
So the diversification they did over the past year—moving supply chains, finding new markets—that didn't help them here?
It helped with tariff exposure, but it didn't solve the geography problem. The Middle East is still the Middle East. The Strait of Hormuz is still the Strait of Hormuz. You can't diversify away from a war in a region that matters to global trade.
What's the actual impact on a company like Zheng's helmet maker?
He's paying premium prices for air freight instead of shipping by sea. His delivery times have stretched from five or six weeks to seven or eight. That's money out of pocket and customers waiting longer. And there's no alternative—rail is blocked because his products are classified as dual-use goods.
Will the Trump-Xi summit actually change anything?
Probably not immediately. Both sides will say they want the strait reopened and stability restored. But the conflict itself isn't something they control directly. The negotiations will drag on. Exporters are already planning to downsize in the second half of the year if this doesn't resolve.
Is this just a China problem?
No. This is a global supply chain problem. Raw materials, oil, fertilizers—they all flow through the Middle East. Chinese exporters are just the ones feeling it first and most acutely because so much of their business depends on moving goods through those lanes.
What would actually solve this for them?
A genuine, durable ceasefire that reopens the strait. But Zheng himself said he's skeptical any ceasefire from this summit would hold. So they're planning for a long disruption.