Chinese exporters are increasingly focused on supply chain disruptions in the Middle East as concerns over shipping delays, rising energy costs, and weaker global demand begin to outweigh earlier tariff-related challenges.
Over the past year, many Chinese exporters worked to reduce reliance on the U.S. market by shifting supply chains overseas and expanding into new regions, including the Middle East, after higher U.S. tariffs disrupted business operations.
However, renewed instability in the Middle East has created fresh challenges for exporters by disrupting major shipping routes, increasing freight costs, and raising concerns over global demand for Chinese goods.
As U.S. President Donald Trump and Chinese President Xi Jinping prepare to meet later this week for discussions on trade and broader political issues, exporters appear more focused on regional supply chain disruptions than tariff policies.
Wang Dan, China director at Eurasia Group, said many exporters have expressed concerns about how long disruptions in the Middle East could continue, with some companies already preparing contingency plans that may include downsizing operations in the second half of the year if conditions persist.
Analysts expect both Beijing and Washington to discuss efforts to restore stability to key shipping routes, including the Strait of Hormuz, although ongoing maritime disruptions and negotiations may continue to create uncertainty.
For some exporters, shipping delays have become a major challenge. Bryan Zheng, founder and chief executive of Livall Tech, said his company has shifted to more expensive air freight shipments to Europe after maritime delays extended delivery times to around 50 days, compared with the usual 30 to 40 days.
Port congestion across Asia has also contributed to rising freight costs. Major Chinese ports including Port of Shanghai and Port of Ningbo-Zhoushan are reportedly facing backlogs due to labor shortages and capacity constraints, slowing container movements on routes to Europe and the Mediterranean.
Rail freight, often viewed as a faster and more affordable alternative, has also become less accessible for some businesses due to restrictions on certain goods moving through sensitive transit areas.
Rising raw material costs are also affecting manufacturers. China’s index tracking input costs for raw materials, fuel, and power rose 3.5% in April compared with a year earlier, up from 0.8% in March following a prolonged downturn.
Cameron Johnson, senior partner at Tidalwave Solutions, said businesses are increasingly concerned about the broader impact on supply chains, raw materials, oil derivatives, and fertilizer supplies.
While tariff concerns remain, many exporters have already adapted by expanding into alternative markets. According to Wind Information, China’s exports to the U.S. fell 20% last year, while exports rose 25.8% to Africa, 13.4% to Southeast Asia, 8.4% to the European Union, and 7.4% to Latin America.
Exports to Gulf nations — including Iran, Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait — rose 9% last year to $144.9 billion, nearly doubling compared with 2019 levels.
With many exporters now less dependent on the U.S. market and better prepared for tariff-related costs, attention remains centered on broader supply chain stability ahead of the Trump-Xi meeting.
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