Chinese manufacturers say they will accelerate the efforts to move production to other countries to bypass US tariffs after President Donald Trump announced a new trade offensive against the second largest economy world.
Beijing considers how to take revenge on Trump’s Decision on Saturday impose an additional 10 percent of tariffs with Chinese exporters, with options ranging from the counter-tourif to export control and depreciation of the currency.
A relatively muffled initial response of the Chinese government, in combination with Trump’s truce with Canada and Mexico On Monday, his plans for a call with Chinese President XI Jinping have encouraged hopes in Beijing in the coming days that there can be room for negotiations.
But with a tariff that should enter into force on Tuesday, companies in the Chinese South Production Heart said their strategies include moving some production to locations, including the Middle East, transferring costs to US customers and seeking alternative markets.
“Many Chinese exporters, especially in the consumer product market, have already lost part of their US market in the last few years after the tariffs started,” said Michael Lu, president of the Chinese Gift Producer Boxbox, referring to Nazie Trump to Nazie Trump. as part of a trade war during its first term of office.
Lu said that Brothersboxbox planned to move part of his production to the United Arab Emirates this year to target the US market. “We hope to bring them back,” he said of his US customers.
TrumpThe threat of an additional 10 percent of tariffs to Chinese goods – which he attributed to the alleged inactivity of Beijing for the export of fentaline to the United States – was raised during his election campaign.
But Chinese companies have already diversified their trade in recent years. The direct proportion of imports in the country fell eight percentage points between 2017 and 2023, according to the Rhodium Group report last year.
Let Chinese production move to third countries, from where it is exported to the United States. For example, the proportion of American imports from Vietnam and Mexico increased significantly over the same period.
Lynn Song, the main economist of the Great China in Ing, said the tariff would have a limited effect because “a lot of exports sensitive to the price in the US is already diverted as a result of the first trade war”.
Since Trump aimed at Mexico, Chinese companies would probably transfer more stores to Southeast Asia and Latin America, he said.
Sophisticated Chinese exports, such as parts of the machine, would also be difficult to replace, which means that US customers would have to absorb price increase.
Tony Cao from the Foshan Nanhai Yingya hardware, a company in the Chinese province of the southern Guangdong, which in the United States makes about 5 percent of sales, said Trump’s tariffs will hit US importers stronger than Chinese manufacturers.
“They have to buy Chinese products,” Cao said. “Their procurement costs will increase and therefore their sales prices will increase.”
Some analysts said that the speed of the promised implementation of the tariff was a challenge for Beijing and questioned how many more Chinese production capacity can be easily moved abroad.
“Anyone who could [move supply chains] It’s already, “said Cameron Johnson, a partner in Tidalwave Solutions. Countries like VietnamWhere Chinese companies set up production lines, they could also be affected by tariffs, he said.
“Anyone who has a significant trade excess with the US will get some form of tariff,” Johnson said.
Amy Lin, head of the sales of Chinese footwear manufacturers Teshuialong, said investments abroad require more capital and labor than her company could collect. Instead, Teshuialong would ask for new buyers in markets like the Middle East. “Life goes on,” Lin said.
Beijing criticized Trump’s new tariffs and threatened to file a lawsuit The World Trade Organization, but has not yet announced retaliation.
Analysts pointed out options such as export controls on rare countries – which are key to the new energy industry – or antitrust’s investigation like one Recently announced Against American Chip Company Nvidia.
Johnson Tidalwave said other measures could include further control of drones and parts of electric vehicles in the US.
Most analysts believe that Washington will impose more tariffs, especially after a conclusion in April in the investigation that Trump ordered at the 2019 trade agreement with Beijing during his first administration.
Although Chinese imports of US agricultural products increased a little after that job, its purchase of US produced goods decreased in 2020 and 2021, while pandemic devastated on the global supply chains.
In the meantime, some analysts believe that the best Chinese strategy is quietly reducing their own imports of targeted American products, such as aircraft, agricultural products and medical devices.
This could harm the constituencies of powerful Republican politicians or industrial groups, such as farmers and petroleum and gas sector, while waiting for the opportunity to negotiate a new agreement.
“We do not yield the possibility of coming reciprocal tariffs [from China]But we think they will make them quiet, “said Chris Beddor, Darkal’s deputy director of China, to avoid attracting the attention of the President from Canada and Mexico, and maybe the EU.
“Trump is obviously still open to work at some point,” Beddor added, pointing to his delaying prohibition On Tictok, a Chinese controlled short video platform and a call last month with XI.
Economists have said that Trump’s policies could ultimately strengthen the Chinese economy, forcing Beijing to concentrate on heavy structural reforms, such as directing more resources towards households, not infrastructure and industry.
China reported a record record A trade excess of nearly $ 1 Last year, as the Earth relied on an external demand to make up for the weak domestic economy and slow down the deep property of the sector.
“The irony of the first trade war,” Song of Inga said, was that it enhanced the Chinese pursuit of “self -sufficiency technology”.
Others, however, warned that the Chinese economy is now in a much weaker position. In 2018, the country was able to use the depreciation of the course, the redirection of trade and the reduction of profit margins of exporters to alleviate the tariffs, analysts at Barclays said.
“The upper channels have diminished significantly, suggesting a much greater impact on Chinese trade this time,” they said.
Visualization of Alan Smith and Haohsiang’s data
