On April 23, 2025, a textile manufacturing worker from Binzhou in Shandong, China.
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BEIJING – Chinese manufacturers have suspended production and are turning to new markets as US tariffs are set, according to companies and analysts.
Lost orders are also hits the job.
“We are pleased to announce that we are a part of our company,” said Cameron Johnson, a senior partner based in Shanghai. He said factories that currently make toys, sports goods and low-cost dollar store-type products are the most affected.
“It’s not a huge yet, but it’s happening at the key [export] The Yiwu and Dongguan hubs have concerns that it will grow, Johnson said.
According to Goldman Sachs estimates, approximately 10 to 20 million workers in China are involved in US export companies. Last year, the official number of workers in Chinese cities was 473.45 million.
For a series of rapid announcements this month, the US added more than 100% tariffs on Chinese products, and China retaliated with mutual obligations. US President Donald Trump on Thursday claimed that trade talks with Beijing were ongoing, but China denied that negotiations were ongoing.
According to Ash Monga, founder and CEO of Guangzhou-based Imex Sourcing Services, a supply chain management company, the impact of tariffs on recent tariffs is “a lot bigger” than the impact of the Covid-19 pandemic. He noted that for small businesses with only millions of dollars of resources, the sudden rise in tariffs could not bear them and could leave them out.
He said that due to so much demand from Chinese products clients and other importers, he would launch a new “Tax Help” website on Friday to help small businesses find suppliers outside of China.
Live streaming
Business disruptions have forced Chinese exporters to try new sales strategies.
Woodswool, a manufacturer of athletic wear based in Nimbo near Shanghai, quickly turned his eyes to selling clothing online in China through live streaming. After launching its sales channel about a week ago, the company said it had received more than 30 orders with a total product value of 5,000 yuan ($690).
It’s a small step towards saving a lost business.
“All US orders have been cancelled,” said Li Yan, Factory Manager and Brand Director at Woodswool, in a Mandarin translated by CNBC.
More than half of production was once passed to the US, and some capacity will remain idle for two to three months until the company is able to build a new market, Li said. He said the company has sold it to clients in Europe, Australia and the US for more than 20 years.
The live streaming venture is part of an effort by the leading Chinese tech companies at Beijing’s request to help exporters redirect their products to the domestic market.
Woodswool sells its products online through Baidu. Baidu’s search engine app also includes a live streaming e-commerce platform. Li said she chose the company’s virtual human live streaming option because she allowed it to run within two weeks without spending time and money on renovating the studio and hiring the team.
Baidu said it has announced that it will work with at least hundreds of Chinese companies to launch domestic e-commerce channels from this month onwards, providing subsidies such as “Huiboxing” virtual humans and free artificial intelligence tools to 1 million companies. Virtual Humans are digitally reproduced versions that use AI to mimic sales pitch and automate customer interactions. The company argued that the return on investment is higher than that of humans.
Domestic market challenges
e-commerce Company JD.com was one of the first to announce similar support, finding a way to buy and sell Chinese products in China, with the aim of exporting 20 billion yuan ($272.2 billion). Food delivery company Meituan also announced that it will help exporters distribute domestically without specifying amounts.
However, it is only 5% of the $5246 billion of goods China exported to the US last year.
“Some companies say their business models cannot be implemented under 125% tariffs,” Michael Hart of China’s US Chamber of Commerce told reporters Friday. He also looked at more competition among Chinese companies last week.
Hart said that tariffs in both countries will be exempt at certain levels and likely will be exempt from certain tariffs. “That’s exactly what they support.”
Products branded and developed for suburban US consumers may not work directly with residents of Chinese apartments.
The manufacturer went directly to Douyin, a local version of China’s social media platform Tiktok, and asked consumers to support it, but fatigue is growing.
Looking out of the US
Given the growing scrutiny of US transport, she said fewer Chinese companies are considering diverting exports to the US through other countries. Dudarenok added that while many companies diversify their production to India through Southeast Asia, others have switched from US customers to European and Latin American customers.
Some companies have already built their businesses on other trade routes from China.
Liu Xu runs an e-commerce company called Beijing Mingyuchu, which sells bathroom products to Brazil. While his business faces challenges from fluctuations in exchange rates and fluctuations in shipping charges for containers, Liu said he expects trade with Brazil to ultimately not be affected by China’s tensions with the US.
Exports to China to China doubled between 2018 and 2024, similar to exports to Ghana.
During the COVID-19 pandemic, Ghana-based Cotory Logistics was established to help coordinate shipments amid port delays and coordinate shipments during the construction of reliable logistics routes. The company works primarily in trade between China and Ghana, and now makes between $300,000 and $1 million a year, he said.
Trade tensions between the US and China have led many companies to explore locations for sourcing and manufacturing outside the US, Tordzroh said.
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