Opinion: China’s Grip Is Tightening, America Must Break Free Now

By John F. Di Leo, Opinion Contributor

In recent months, the “reciprocal tariffs” first introduced under IEEPA were found unconstitutional, and were immediately replaced by Section 122 tariffs. The Strait of Hormuz became a dangerous path for the transport of the world’s oil. And both the American and Israeli militaries have been using up a lot of their munition supplies, destroying the offensive capacity of the Iranian military.

Viewed one way, world trade is in tumult, and many in manufacturing may be waiting for things to settle down before moving forward on efforts to rework their supply chains.

But this is no time to postpone such redesigns.

For one thing, almost all American manufacturers and other importers are now filing applications for refunds (formally known as petitions and protests in Customs lingo), since the Supreme Court decision on IEEPA requires that almost every affected importation of the past year be reopened and corrected.

This activity is understandably overwhelming the Customs brokerage industry – essentially recalculating and refiling almost every entry of the past year again, while continuing to do normal ongoing business. As good as one’s Customs broker may be, this double work is almost certain to create an increase in the error rate, as workers are just stretched too thin for the workload.

But in addition, it means that all these companies are drawing the attention of the Bureau of Customs and Border Protection. Companies that may have been flying under the radar now have twice as many documents for Customs agents to look at; this is bound to trigger more random audits, as well as more audits that are not so random.

It is therefore a time for importers to pay more attention to their internal processes. Are their classifications right? Are they declaring their import values in accordance with Customs’ valuation regulations? Are they getting the very tricky rules of origin determination and product marking right? Don’t wait until Customs notices something in a random audit; get ahead of errors by catching and correcting them yourself, first.

The best way to respond to a Customs discovery is always to be able to honestly say “Yes, sir, we noticed that in an internal review, and we’ve been working to correct our process so we could file the corrections.”

Customs (and other government agencies as well) will catch your errors; it’s just a matter of time. This is no time to delay an internal compliance review project.

But there’s another reason for companies to resist the temptation to put off their re-shoring efforts: despite the appearance of turmoil in recent months, the big picture really hasn’t changed at all.

Whether the reciprocal tariff is called IEEPA or Section 122, whether oil prices and stock markets are volatile, the fact remains that the United States is continuing along a long-term process of decoupling from China, encouraging home-shoring of manufacturing, and generally increasing the domestic market.

When a government uses up its supplies of drones, missiles and other other ammunition, it’s going to be increasing its domestic purchasing to replace those stores. Demand will increase. American businesses need to be able to respond.

And no matter what we call the reciprocal tariffs, we know one thing for sure: All the special tariffs on Chinese goods, from Section 301 to Section 232, and all the punitive projects ranging from anti-dumping cases to counter-transshipment investigations are only going to keep on growing as the years go by.

Why? Because China is continuing to be a more and more dangerous trading partner. The wise American business is the one that turns away from his Chinese vendors, and drives away as fast as possible.

China’s real estate market has tanked; they can’t hide it anymore. China’s wholesale burning of whole cities and long-term closures of ports and airports, during the Covid-19 “pandemic,” permanently destroyed the once steady supply chain that once made China so desirable as a supplier. China’s dependence on Iran for cheap energy is now exposed as that critical source disappears; this alone will cause Chinese goods to skyrocket in price, probably quickly.

China’s crackdown on Hazardous Materials shipping has been understandable, considering some of their HazMat disasters over the years, but it has shown the fundamental error of America’s dependence on China for lithium batteries and the products they power, as China makes the approval of such products for shipment harder and costlier every year.

The main longstanding problems with sourcing from China haven’t changed at all: the currency manipulation and intellectual property theft upon which China built its empire remain their standard operating procedure.

But they haven’t backed off from their plan to make the world beg for permission on the use of the rare earth materials to which China has applied their export control regime. Beijing postponed full implementation, to lull our business sector into a false sense of security, but it is still on schedule to enslave the world’s business sector by year-end.

When every product that depends on Chinese rare earths and other strategic materials is fully controlled by Beijing, it will no longer be an exaggeration to say that the American and European supply chains are being held hostage.

For these reasons – and many more too – it is time for America’s manufacturing sector both to expedite re-shoring efforts away from China, and to implement internal compliance controls to ensure that these changes are managed correctly.

The government is increasing its military purchases, and increasing the “Made in USA” content requirements at the same time.

The energy sector is booming here at home, as the United States again becomes the largest energy supplier in the world; that means not only oil but its byproducts will be more plentiful and available than ever, here at home, in the years to come.

The One Big Beautiful Bill locked in permanent federal tax cuts so that businesses could plan ahead. Between that and the negotiations of the reciprocal tariff deals (most of which were not undone by the Supreme Court finding as was feared), there will be an explosion of new manufacturing in the USA over the years to come, utilizing robotics and other labor-saving plant equipment that the United States specializes in making.

President Trump is known for hyperbole, but when he says that we are at the dawn of a new era in manufacturing, he may not be exaggerating at all.

The question is which companies are prepared to take advantage of the coming boom, and which ones are left behind.

The companies who never abandoned American supply chains will have the easiest time of it; even those importers who saw the light during President Trump’s first term and started their onshoring projects then, will also be able to take full advantage of these opportunities.

But those who keep on thinking that it’s more comfortable to keep outsourcing to Chinese vendors, kicking that can down the road again and again, may soon find themselves hostage to a supply chain that no longer exists, where China holds all the cards, and the cost model has been completely turned against them. Now is the time to join the boom – aggressively but carefully – or be left behind.

Copyright 2026 John F. Di Leo