Chinese exporters are increasingly focused on the resolution of the Iran war, viewing it as a more pressing concern than the ongoing U.S. tariffs, as U.S. President Donald Trump and Chinese President Xi Jinping prepare for a summit later this week [1]. Over the past year, exporters have adapted to the tariff regime by diversifying supply chains and targeting new markets, including the Middle East, but the Iran conflict has introduced new challenges, particularly supply chain disruptions and a historic energy shock [1].
The war has severely impacted critical shipping lanes, notably the Strait of Hormuz, leading to significant delays and increased costs. For example, Bryan Zheng, CEO of Livall Tech, has resorted to expensive air freight to ship products to Europe, as maritime delays now stretch shipments to around 50 days, compared to the usual 30-40 days [1]. Port congestion in Shanghai and Ningbo has further exacerbated the situation, with labor shortages and capacity constraints causing backlogs and soaring freight rates on Asia-Europe and Mediterranean routes [1].
Rail freight, which could have offered a faster and cheaper alternative, has been blocked for certain goods classified as sensitive due to the active conflict zones, further limiting options for exporters [1]. Many businesses are preparing contingency plans to downsize in the second half of the year if the conflict persists, reflecting widespread anxiety about overseas demand and the duration of the war [1].
Analysts expect that the Trump-Xi summit will likely see both leaders reaffirming their intention to reopen the Strait of Hormuz and restore regional stability. However, maritime standoffs and intermittent negotiations are expected to continue, suggesting that supply chain disruptions may not be resolved quickly [1].
CONCLUSION
The Iran war has overtaken tariffs as the primary concern for Chinese exporters, with supply chain disruptions and rising freight costs threatening global demand for Chinese goods. The upcoming Trump-Xi summit is seen as a potential turning point, but ongoing instability in the region means market uncertainty will likely persist. Exporters are preparing for further challenges if the conflict continues.