As US tariffs on Chinese goods escalate, American consumers may soon face a new reality: products made in China could become a rarity. With Chinese exporters struggling to cope with the sudden loss of orders, some are exploring alternative markets and strategies to mitigate the impact.
China’s manufacturing heartland is feeling the impact of soaring U.S. tariffs on its goods.
A tariff is a tax imposed on imported goods by a country's government.
In the United States, tariffs are used to protect domestic industries and generate revenue.
The US imposes tariffs on various products, including agricultural items, machinery, and electronics.
According to the US Census Bureau, in 2020, tariffs generated $21.3 billion in revenue for the US government.
Tariffs can have significant impacts on international trade, leading to retaliatory measures from other countries.
From blenders to bicycles, American consumers may soon find it harder to buy products made in China due to escalating tit-for-tat tariffs between the two countries.
China is the world's largest exporter, accounting for over 13% of global exports.
The country's export-driven economy has been fueled by its vast manufacturing sector, which produces goods such as electronics, textiles, and machinery.
China's strategic location on major trade routes and its extensive network of free trade agreements have also contributed to its export success.
In 2020, China's exports totaled over $2.1 trillion, making it the largest exporter in the world.
The situation is dire for some Chinese exporters who rely heavily on sales in the United States. Mini-oven maker Foshan Zero Point Intelligent Electrical Appliance Co., Ltd. sells 90% of its products in America, according to sales manager Steven Zhang. Escalating tariffs this month brought everything to a screeching halt.
‘We told our suppliers not to deliver raw materials,’ Zhang said. ‘Our workers were put on leave.’ The company’s production came to a grinding halt as it struggled to cope with the sudden loss of orders.
Another company, Guangdong Gales Electrical Appliance Co., Ltd., which makes blenders and juicers, also felt the pinch. Sales manager Monica Liang said all U.S. customers had stopped their orders, leaving everyone waiting for news on what’s happening next.
‘It’s impossible to know how big a dent the trade war will put in America’s imports from China,’ says Julian Evans-Pritchard, head of China economics at Capital Economics. ‘The trend may be to zero.’
Despite this gloomy outlook, some Chinese exporters are exploring alternative markets and strategies to mitigate the impact of the tariffs.
For instance, Guangdong Kinwing Electric Industrial Co.,Ltd., is looking into expanding its sales in South America, Europe, and Asia. The company’s boss is also in contact with local governments and businesses to look for policy support and solutions.
However, pivoting to new markets won’t be easy for some companies. Juicers, for example, aren’t very popular in China, where people prefer hot drinks. Monica Liang of Guangdong Gales Electrical Appliance Co., Ltd. says her company’s products are designed with European-American customers in mind, which makes them less appealing to Chinese consumers.
As the situation continues to unfold, it remains to be seen how Chinese exporters will adapt to the changing trade landscape.
