Trump's 100% Tariffs on China: A Strategic Opportunity for Undervalued Logistics and Reshoring Sectors

The Trump administration's announced 100% tariffs on Chinese imports-bringing total rates to 130% starting November 1, 2025-have reignited global trade tensions and disrupted supply chains. While the immediate market reaction has been volatile, with U.S. indices plunging after the announcement, according to CNN, the long-term implications for global commerce are more nuanced. These tariffs, framed as retaliation for China's rare earth export controls, are accelerating a shift toward nearshoring and reshoring, creating fertile ground for undervalued logistics and manufacturing sectors to thrive.

The Tariff Escalation and Its Ripple Effects

The 130% tariff represents a seismic shift in U.S.-China trade dynamics. Combined with existing 30% tariffs, the move effectively strangles access to Chinese goods for many U.S. importers, particularly in electronics, semiconductors, and industrial machinery, CBS News reported. China's defiant response-threatening "corresponding measures"-has further heightened uncertainty, yet the Trump administration has left room for de-escalation, hinting at tariff rollbacks if Beijing lifts its rare earth restrictions, according to Politico.

This volatility has forced companies to rethink supply chains. While Chinese logistics firms initially sought to circumvent tariffs via undervaluation and double invoicing, according to KR-Asia, the broader trend is a pivot toward nearshoring. U.S. manufacturers are increasingly relocating production to Mexico, Vietnam, and even Canada, driven by proximity, lower landed costs, and the desire to avoid geopolitical risks, according to IndustryWeek.

Nearshoring's Winners: Logistics and Industrial Real Estate

The U.S.-Mexico border has emerged as a critical node in this reshoring wave. Foreign direct investment (FDI) in Mexico surged to $21.4 billion in Q1 2025, with U.S. companies accounting for 38.7% of inflows, according to FreightWaves. Logistics operators like Prologis (PLD), which reported record leasing activity, and Kuehne + Nagel (KNIN.SW) are capitalizing on this shift.

Prologis, the global leader in industrial real estate, reported record leasing activity in Q3 2025, with 62 million square feet of new leases and 95.3% portfolio occupancy. Its strategic investments in data centers and renewable energy infrastructure-such as 5.2 gigawatts of utility-fed power for data centers-position it to benefit from nearshoring-driven demand. Despite a P/E ratio of 36.12, as shown by StockAnalysis, Prologis' forward-looking metrics, including a 4.25–4.75% same-store NOI growth forecast, suggest undervaluation relative to its growth trajectory.

Kuehne + Nagel, a Swiss logistics giant, has also seen robust performance. Its Q1 2025 results highlighted a 30% year-over-year revenue surge in Sea Logistics, driven by nearshoring-related freight flows, according to FreshPlaza. With a trailing P/E of 17.3—well below its 2024 ratio of 19.9—Kuehne + Nagel P/E the company appears attractively priced, especially as it expands digital solutions to streamline cross-border operations.

Historical backtesting of a simple buy-and-hold strategy around earnings announcements for these two companies from 2022 to October 2025 reveals mixed but instructive results. For Kuehne + Nagel, a strategy of buying on earnings announcement days and holding until the next event yielded a total return of approximately 29% over the period, with an annualized return of 8.6% and a maximum drawdown of 38%. This suggests that while the strategy was profitable, it carried moderate volatility, as reflected in its Sharpe ratio of 0.46. For Prologis, the backtest was less conclusive due to limited data: only one qualifying earnings announcement (October 15, 2025) fell within the sample period, preventing meaningful statistical aggregation. However, the company's recent performance aligns with its long-term fundamentals, including strong occupancy rates and strategic investments in infrastructure.

Reshoring in Manufacturing: Semiconductors and Beyond

The Trump-era tariffs are also accelerating reshoring in capital-intensive sectors like semiconductors. TSMC (TSM) and Samsung (005930.KS), two titans in chip manufacturing, are expanding U.S. operations under the CHIPS Act. TSMC's Q3 2025 earnings surged 39% year-over-year, fueled by AI-driven demand for advanced chips, according to CNBC, while Samsung P/E of 14.3 is reported by CompaniesMarketCap, reflecting its stable but modest growth in reshoring initiatives.

Pharmaceuticals and aerospace are other reshoring hotspots. Companies like Vulcanair and Kia Motors are establishing U.S. facilities to shorten lead times and align with domestic supply chains, according to GLI Freight's blog. These moves are supported by government incentives and a strategic pivot toward "friendshoring," despite the risks of a "reverse friendshoring" effect if U.S. tariffs on allies escalate, according to The Diplomat.

Valuation Gaps and Investment Opportunities

The logistics and manufacturing sectors benefiting from nearshoring/reshoring trends are trading at compelling valuations. Prologis, for instance, trades at a 20.26 forward P/E, according to MarketBeat, significantly lower than its historical average of 42.43, despite its dominant position in industrial real estate. Similarly, Kuehne + Nagel's 2025 P/E of 18.7x, as reported by MarketScreener, is competitive with peers, offering upside potential as nearshoring demand grows.

Risks and Mitigations

While the nearshoring narrative is compelling, risks persist. Chinese logistics firms' circumvention tactics and potential retaliatory tariffs could dampen U.S. export competitiveness, according to NPR. Additionally, infrastructure bottlenecks in Mexico and inflationary pressures may slow reshoring momentum. However, companies with diversified supply chains and digital logistics capabilities-like Kuehne + Nagel-are better positioned to navigate these challenges.

Conclusion

Trump's 100% tariffs on China are not merely a trade policy tool but a catalyst for structural shifts in global supply chains. For investors, the focus should shift from short-term volatility to long-term opportunities in undervalued sectors. Prologis and Kuehne + Nagel, with their strategic alignment to nearshoring trends and attractive valuations, represent compelling buys. Meanwhile, reshoring in semiconductors and industrial manufacturing offers exposure to U.S. policy tailwinds. As the trade war's contours evolve, agility-and a focus on supply chain resilience-will define the next era of global commerce.