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Home Business & Economy

Chinese factories rush to reduce reliance on Donald Trump’s US

Spluk.ph by Spluk.ph
June 22, 2025
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Chinese factories rush to reduce reliance on Donald Trump’s US
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Chinese language producers are racing to seek out patrons at dwelling and overseas as commerce tensions with the US threaten their single largest export market.

Chinese language commerce information launched since US President Donald Trump introduced excessive tariffs in April exhibits elevated exports to different markets partially offsetting a plunge in US-bound shipments.

The worth of exports to Europe in May climbed 12 per cent from a 12 months earlier, with shipments to Germany up 22 per cent. Exports to south-east Asian nations rose 15 per cent.

Analysts mentioned China’s producers would have the ability to make up in different markets no less than a few of the gross sales misplaced due to US tariffs, serving to to make sure exports stay a pillar of a nationwide financial system nonetheless battling a property sector downturn and weak consumer confidence.

“Consumption is weak and there’s much less driving the financial system on that entrance,” mentioned Leah Fahy, China economist at Capital Economics. “China’s nonetheless going to need to export all these items, so it’s going to need to go to different nations they usually’re going to face a surge in Chinese language imports.”

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Producers’ efforts are on show in Zhejiang, China’s second-biggest exporting province, the place many manufacturing facility house owners are urgently shifting focus in direction of buying and selling companions that look extra steady than the US, or to the massive however fiercely contested home market.

“We need to discover new clients in markets like Europe,” mentioned Xia Shukun, a supervisor at Shaoxing Sulong Outside Expertise, which till now has solely exported to Asia and the US.

Xia mentioned a Norwegian purchaser had lately toured their manufacturing facility, the place the screech of blades slicing steel for camp stoves reverberates throughout three flooring, elevating hopes the corporate would possibly win its first buyer in Europe. “We’re very keen — we are able to make something,” Xia mentioned.

With common US tariff charges on Chinese language items nonetheless above 50 per cent, and the likelihood Trump will reimpose sky-high charges that may make most commerce unviable, manufacturing facility house owners and managers up and down the Zhejiang coast mentioned they have been on the lookout for new markets.

Chen Zebin, whose household runs nail lamp producer Shaoxing Shangyu Lihua Digital Expertise, mentioned the proportion of its output going to the US had fallen to about 30 per cent this 12 months from 60 per cent in 2024, prompting it to shift to extra home gross sales, the place margins are thinner.

Production line at Shaoxing Shangyu Lihua Electronic Technology
A manufacturing line at Shaoxing Shangyu Lihua Digital Expertise © Chen Zebin

Chen mentioned orders from the US have been sluggish regardless of a trade war truce between Washington and Beijing. “That highway isn’t working so we have to discover a new one,” he mentioned, including the corporate was exploring on-line gross sales channels, comparable to Temu, and seeking customers in new markets, together with the Center East and Europe.

Doris Xia, a supervisor at Zhejiang-based Kimo mentioned the facility software producer was prioritising enlargement in Europe, Russia and south-east Asia after getting a cool reception at a commerce present in Las Vegas occasion in March, when Trump had solely imposed an additional 20 per cent tariff.

“Principally no clients came to visit to us,” Xia mentioned.

After the US, the highest vacation spot of Chinese language exports by worth final 12 months was the EU, adopted by Vietnam — the place many items are processed for re-export — Japan and South Korea.

The European Fee is attempting to trace and counter any surges of Chinese language imports. Its first surveillance report discovered sudden will increase in imports of merchandise starting from guitars to industrial robots, with China indicated as the most important supply of the surges.

“We’re seeing a brand new ‘China shock’,” mentioned fee president Ursula von der Leyen on the G7 gathering in Canada this month. “As China’s financial system slows down, Beijing floods world markets with subsidised overcapacity that its personal market can’t take in.”

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Pencil Chu, who works with firms exporting by means of Chinese language ecommerce large Alibaba, mentioned factories that relied on the US for a comparatively small portion of their enterprise have been merely “slicing it off”.

“They need stability and in the long run it doesn’t look good,” Chu mentioned. “Many factories are concentrating on Europe.”

Seashore umbrella maker Ewing Tourism Merchandise, which bought most of its merchandise to shops comparable to Lidl and Ikea in Europe even earlier than Trump’s tariff blitz, is beginning to be hit by a flood of merchandise provided by beforehand US-focused Chinese language rivals. 

“European patrons have too many factories to select from, it’s driving costs down,” mentioned Vera Wu, the corporate’s 45-year-old founder. “That is the hardest 12 months but.”

With Zhejiang’s annual exports value about $550bn, second solely to southern Guangdong, leaders of the province are eager to assist its 100,000 producers climate the tariff turmoil.

The provincial authorities has begun protecting the price of attending commerce gala’s overseas, rolling out language programmes to domesticate 100,000 new cross-border ecommerce sellers and growing subsidies for export credit score insurance coverage.

The Zhejiang metropolis of Cixi, billed as China’s “dwelling of bearings”, provides some consolation to factories now making an attempt to pivot from the US.

Cixi locals say some bearings crops closed after Trump hit them with a 25 per cent tariff in his first time period. Chinese language customs information exhibits bearings exports to the US have fallen 25 per cent since 2017.

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However metropolis streets are nonetheless lined with bearing factories. Wang, a supervisor at a 40-worker bearing manufacturing facility supervisor who requested to be recognized solely by his surname, mentioned that again in 2018 he was intently following the commerce information out of Beijing and Washington.

Now, with containers filled with bearings destined for Indonesia and the Philippines stacked by his manufacturing facility door, Wang is far much less involved.

“The sign was clear, US-China relations have been chaotic . . . We discovered new patrons in south east Asia,” he mentioned. “This time, I’m not paying consideration.”



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