The Flanders-China Chamber of Commerce organized a webinar – with the support of Flanders Investment & Trade – focused on the challenges and opportunities in the supply chain for European businesses on 15 May 2025.
Ms. Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, introduced the topic of the webinar and the speakers. Let's first look at the bigger picture of EU-China trade. Despite ongoing tensions, the mutual dependence between the EU and China remains strong. Every day, the EU and China trade over €2 billion worth of goods that adds up to more than €730 billion annually, much of it in high value sectors like machinery, vehicles, chemicals and advanced manufacturing. Investment flows are equally significant in 2000-24. Chinese accumulated direct investment in the EU reached €185 billion, while European accumulated investment in China stood at €184 billion. Even in turbulent times, the economic ties between our countries continue to run deep, but we can't ignore the disruptions caused by geopolitics, especially the U.S.-China trade tensions. Following trade talks, the U.S. and China agreed to a 90-day pause on mutual tariff reductions. U.S. tariffs on Chinese goods have dropped to 30%, while China's tariffs on U.S. goods have fallen to 10%. Much uncertainty remains about what happens after the 90 days. So this unpredictability and uncertainty is very difficult for our companies doing business in China and a lot of trade will be done during these 90 days.
A recent survey of European companies in China revealed that about 44% of respondents said they were importing U.S. goods affected by Chinese tariffs, and that prices had already risen or were expected to. Many companies said they plan to switch suppliers in response to these rising costs. The survey also showed that while business confidence has been shaken by the trade war, European firms are not pulling back. In fact, many are doubling down on their localization strategies in China. Even though you have all this tension, if you're going to be able to compete on price and quality, China is still the place you need to be. So even though everyone talks about de-risking, we actually see a little bit of the opposite, and that sentiment captures also the delicate balancing act many European companies are now navigating.
Didier Duponselle, Business Development Director Consumer, Ahlers, talked about “Navigating the Waves: The Impact of Geopolitical Shifts and Shipping Orders on Transportation Costs related to China". On the logistics side, from an analyst point of view, we were one of the first to set foot on the ground in China in the early 90s. We have absolutely zero intention to change that, on the contrary, we are looking to grow further through some contracts and several companies are really interesting to grow further and to make use of the potential of the Chinese labor and production capacity. So in the field we don't really see a lot of changes. Ahlers is a logistics service provider. We organize and coordinate transportation, customs and warehousing where needed within very specific markets. We offer high quality services that we try to be as sustainable as possible, and we can to a certain extent make our solutions a bit more tailored than what the bigger giants in logistics do. We are present from Western Europe all the way to China, which does not mean that we're not trading with the rest of the world as well. But China is a critical part because it is at the end of the Silk Road for us and for Chinese at the beginning of the Silk Road. Today, it is actually at the beginning because most of the production is coming from China.
The supply chains, especially the international ones, are undergoing structural changes. Decisions have been taken by every single company I spoke to. All companies are taking actions and there have been trade wars already since a long time. It's just a lot more mediatized and a lot more drastic today, but let's be clear that it's creating a consciousness within companies to rethink supply chains, and the transformation is accelerating. I think we will not be able to live without globalization, but it will not be as fast as it once was. What we've seen in the short term is that exporters abandoned some shipments mid-transit. They just said “I'm not going there, bring my containers back, we're going to reroute, we're going to wait because there is too much uncertainty. Instead of bringing them to the U.S., bring them to Europe, at least I know that the Europeans are a more stable trade partner today”.
China-U.S. shipments from certain shippers dropped from 40 to 50 containers to three to six containers per day. This is what uncertainty does in the short run and is to a certain extent a panic reaction, but it is also a common sense reaction as with such high tariffs it is no longer viable to sell your products. All the big ship owners changed their departures till last week, 29% down between China and U.S., probably awaiting the outcome of the trade talks. The impact on capacity is huge. Already in 2023 capacity for certain product groups was down 6%. When you have less trade to the U.S. for your products, you will look for different markets, and at least 2% of that trade went into Europe, where there was a a market that was happy to absorb part of these volumes. There is clearly a shift, so trade tariffs and sanctions have impacts. Very interesting as well is that during the last years, the Chinese exporters actually were raising their prices, they didn't absorb these extra import charges. We expect an increase in Chinese exports to Europe in June. The spot rates from China to Europe have been declining, not because there is no demand from Europe for Chinese goods, because we are not in economic glory times. Carriers have shifted capacity. Since April, you can see 117,000 TEU, so that's four or five huge vessels which do monthly turnarounds which have been shifted. In the spot market, you can get your 40 foot container for USD2,744 from Shanghai to Antwerp. On a structural level, a lot more containers have been added in 2024 than we needed, so we have a structural overcapacity in the global market. For the medium term, the contract market is very very uncertain. The drop in tariffs into Europe which we see now, we do not expect in the longer term contracts, especially not with the deal between U.S. and China right now.
Giovanni Gijsels, Partner Customs & International Trade, PwC, gave a presentation on “Navigating U.S. Tariffs: Implications for EU-China Trade Relations”. It goes without saying that we live in very volatile times, and the big discussions with clients is all about Trump. The adaptations are occurring very quickly. We had Covid, which had a big impact. We had the Suez Canal, which was blocked, which caused a massive disruption, but actually you see that trade flows adapted rather quickly. We're in the transition towards a new type of economy. There are workforce and population challenges. The Chinese population pyramid is almost a Christmas tree, so it's massively declining very rapidly, which is of course a challenge that more and more people are looking into. How will we keep our production at a certain level where we will have less people potentially being able to work in factories? These tariffs are imposed by executive orders, which the President can do, but they're not really legislation. So there are limits in principle to what they can do. Where it's not clearly written, President Trump and his administration will push the boundaries to the maximum extent and face the challenges of courts potentially. More and more people start to question, can you put everything under an emergency act?
On the 4th of February, we had the fentanyl tariffs, then they started looking into more sector related activities on March 4 and steel and aluminum tariffs a bit later, and then on April 2, these reciprocal tariffs were announced at 10%. The reciprocal tariffs are suspended for 90 days, but the 10% is really a massive change. European tariffs on average are below 2%. China said it would match what the U.S. is doing and that's where actually things started escalating as of the 9th of April. On the 12th of April, they had to back down a bit, certainly because of all the iPhones, for instance, coming out of China, which would become too expensive, so they started with the first exclusion. On the 17th of April, there was this announcement that for certain Chinese products the tariffs were as high as 245%. Also an important is the port fee structure on Chinese carriers and vessels to shift away from Chinese vessels so as to recreate an American shipbuilding industry. Also important as of the 1st of May is the suspension of the de minimis treatment. It would have meant millions of declarations on a daily basis for very high amounts, which led some express couriers saying they will not do B2C shipments anymore, because the risk is too high.
China has also been heavily impacted by restrictions that the U.S. and to a certain extent Europe has put on the sharing of technology, such as the U.S. pushing ASML in the Netherlands not to sell machines to make semiconductors to China to try to limit their semiconductor capability. If you have a U.S. product here in Europe and you want to ship it to China, you need to follow the U.S. rules. China is doing the same. They started also sanctioning certain U.S. companies that are actually not able to do business anymore in China, but mainly they use rare earth minerals as a stick. Europe depends on U.S. technologies for a large extent, but also relies on China both as a market and producer, so we are a bit between a rock and a hard place at this point in time. We cannot play the role of superpower, even though our market is quite big. What we have been doing with companies is looking into the impact on supply chains. We also had a discussion on pharmaceutical exports out of Belgium. It is a flow of USD17 billion, so if you tag that with 10%, it's USD1.7 billion that comes on top as an additional cost. In the coming weeks you will start seeing in the supply chains that these tariffs will have a price increasing effect. China basically is the manufacturer for the U.S. and lends money to the U.S., which they use to buy things from China. They say we don't want to go to a decoupling, and I think that makes sense. China is also a big stakeholder of the U.S. debt, and whether they like each other or not, they are bound together.
Zhao Feng, Deputy Director, CCPIT introduced the International Supply Chain Expo. Over the past few decades with the deepening development of the economic globalization, international industrial and supply chain cooperation has been increasing and the countries' industrial chains have been embedded in each other. The U.S. government using tariffs as a weapon is seriously disrupting the global supply chain. There has been a tariff deal between China and the United States, but we believe that only by adhering to openness and cooperation in the global industrial and supply chain can we achieve win-win development. In order to meet the urgent need of the global business communities to maintain the stability and resilience of the international industry and supply chain, CCPIT hosted the first CISCE in Beijing in 2023. The third CISCE will take place from July 16 to 20 in Beijing. The CISCE is the world's first national level exhibition on the theme of the supply chain, focused on promoting the connection of the upstream, mainstream and downstream industrial integration of the large, medium and small enterprises' collaboration in industry, academia, research, and application, and engagement between Chinese and foreign enterprises. At the second edition last year there were 620 exhibitors from 69 countries and regions participating and overseas exhibitors accounting for 32%. The CISCE based on the full industrial chain perspective has six chains: advanced manufacturing, clean energy, smart vehicles, digital technology, healthy life, and green agriculture as well as supply chain service exhibition areas.
