A Wave of Panic Buying Signals the Start of a New Economic Shock
Written on 11 April 2025.
A Wave of Panic Buying Signals the Start of a New Economic Shock
Over the past few weeks, a dramatic resurgence in panic buying has erupted across the United States, reminiscent of the early days of the COVID-19 pandemic. But unlike the previous wave, which was driven by fear of lockdowns and health measures, this one is fueled by economic warfare—specifically, a sharp escalation in tariffs on Chinese imports.
The Biden-Trump trade policy continuity, capped by a recent executive order, has pushed the total tariff rate on Chinese imports to a staggering 145%. According to CNBC, this includes a 125% tariff increase plus a preexisting 20% fentanyl-related tariff. The result: shockwaves through both supply chains and consumer markets.
A Hard Decoupling with Global Consequences
Nick Marro, an economist with the Economist Intelligence Unit, described this moment as pushing the U.S. and China toward a "hard decoupling"—a state where the two economies become fully disentangled, with minimal trade and investment. The implications are profound: supply shortages, skyrocketing prices, and a realignment of global trade.
Consumers in the U.S. are responding predictably. Retailers like Costco and Apple Stores are experiencing panic-induced foot traffic, with customers scrambling to buy everything from smartphones and electronics to household goods. Apple reportedly saw a sales surge over the weekend more typical of an iPhone launch event, all due to fears of massive price hikes.
Europe: Not a Bystander
While the tariffs directly affect U.S.–China trade, Europe is not insulated from the consequences. In Sweden, residents are already familiar with inflation shocks—food prices have seen significant increases since 2019. For instance, the price of butter has tripled, rising from 20 SEK to 60 SEK per half kilo.
Now, a similar pattern is likely to unfold with electronics, tools, and automotive parts—many of which are either manufactured in China or depend on Chinese components. Even European-branded products are often tied into these global supply chains. A breakdown in U.S.-China trade could create spillover effects that raise prices across the EU and beyond.
The Coming Shock: Tools, Tech, and More
In Sweden and across Europe, price increases on tools and tech products could mimic the food inflation trend—possibly doubling in cost. Brands like Ryobi or Einhell may become significantly more expensive or even unavailable. Electronics, including phones, routers, and computers, rely heavily on Chinese production. If factories in China reorient away from U.S. markets or become overwhelmed, Europe could face both delays and higher import prices.
Auto parts are another vulnerable sector. With many components sourced from China, car maintenance and repairs could become costlier, and new vehicle prices may spike. Deutsche Bank analysts have already noted an unexpected surge in U.S. car sales in March 2025—interpreted as a form of pre-tariff panic buying. A similar dynamic may emerge in Europe.
Amazon and the Supply Chain Collapse
According to Wedbush Securities, up to 70% of goods sold on Amazon are made in China. With new tariffs, sellers are faced with two choices: pass the increased cost to consumers or exit the U.S. market altogether. Some Chinese sellers have already decided to abandon the American market, refocusing efforts on Europe, Canada, and Mexico. This will eventually strain those markets too.
Andy Jassy, CEO of Amazon, acknowledged the situation, noting that most sellers will simply raise prices. Even with strategic forward buying, these efforts can only delay the inevitable.
Bigger Stakes: Taiwan and the Decoupling Dilemma
Perhaps the most alarming part of this geopolitical shift is the potential military fallout. Economic interdependence has historically been a deterrent to war between China and Taiwan. If that deterrent disappears—as the economies decouple—China may see an opening to act militarily. The strategic risk increases as economic ties unwind.
Conclusion
The panic buying we are seeing today is not merely irrational behavior—it is a rational reaction to a rapidly shifting economic and geopolitical landscape. For those in Sweden and across Europe, now is the time to consider what products may soon become scarce or unaffordable. The next wave of inflation is likely to come through tools, electronics, car parts, and other essentials that rely on the global supply chain—most notably, Chinese manufacturing.
The world may be entering a new phase of economic dislocation—one that will challenge assumptions about abundance, affordability, and access. In uncertain times, understanding the signs of change is the first step toward preparing for what’s next.