Chinese manufacturers say they are accelerating efforts to move production to other countries to circumvent American prices after President Donald Trump announced a new commercial offensive against the second world economy.
Beijing envisages how to retaliate against Trump Decision Saturday To impose an additional 10% tariff on Chinese exporters, with options ranging from counter-tariffs to export controls and depreciation of currencies.
The relatively deaf initial response of the Chinese government, combined with Trump car with Canada and Mexico On Monday and his plans for a call with Chinese President Xi Jinping in the coming days, fueled in Beijing that there could be room for negotiations.
But with the price which should take effect on Tuesday, the southern companies of the southern manufacturing of China said that their strategies included the movement of production to places, including the Middle East, the cost of American customers and the search for alternative markets.
“Many Chinese exporters, especially on the consumer products market, had already lost part of their American market in recent years after the start of prices,” said Michael Lu, president of the gift box producer Based in China, Brothersbox, referring to Trump samples imposed as part of a trade war during his first mandate.
Lu said Brothersbox planned to move part of its production to the United Arab Emirates this year to target the American market. “We hope to win them back,” he said about his American customers.
AssetThe threat of an additional 10% tariff on Chinese goods – which he attributed to the alleged inaction of Beijing on fentanyl exports in the United States – was raised during his electoral campaign.
But Chinese companies have already diversified their trade in recent years. The direct share of the country of American imports fell eight percentage points between 2017 and 2023, according to a Rhodium Group report last year.
Chinese production has moved to third countries, from where it is exported to the United States. The share of American imports of Vietnam and Mexico, for example, increased considerably during the same period.
Lynn Song, chief economist of Grand China at ING, said that the price would have a limited effect because “a large part of the prices sensitive to the United States would have already been redirected as a result of the First Trade War”.
With Trump to Mexico, Chinese companies would likely move more trade to Southeast Asia and Latin America, he said.
More sophisticated Chinese exports, such as machine parts, would also be difficult to substitute, which means that American buyers should absorb price increases.
Tony Cao of Foshan Nanhai Yingya Hardware Products, a company in the Chinese province of Guangdong in China which makes around 5% of its sales in the United States, said that Trump prices would hit American importers harder than Chinese producers.
“They have to buy Chinese products,” said Cao. “Their supply costs will increase and, therefore, their selling prices will increase accordingly.”
Some analysts have declared that the speed of the promised implementation of prices posed a challenge for Beijing and wondered how easily Chinese manufacturing capacity could be moved abroad.
“Anyone could [move supply chains] I have already done so, ”said Cameron Johnson, partner at Consultancy Tidalwave Solutions. Country like VietnamWhere Chinese companies have set up production lines, could also be affected by prices, he said.
“Anyone who has an important trade surplus with the United States will get a price form,” said Johnson.
Amy Lin, sales director at the Chinese shoe manufacturer Teshuailong, said that investment abroad required more capital and labor than her business could not bring together. Instead, Teshuailong would look for new customers in markets such as the Middle East. “Life continues,” said Lin.
Beijing criticized Trump’s new prices and threatened to Take up a legal action to the World Trade Organization, but has not yet announced any reprisals.
Analysts highlighted options such as export controls on rare land – which are essential to the new energy industry – or antitrust surveys such as that recently announced Against the NVIDIA American flea company.
Johnson de Tidalwave said that other measures may include other drone exports and electric vehicle parts in the United States.
Most analysts believe that Washington will impose more prices, in particular after the conclusion in April of an investigation that Trump ordered the 2019 trade agreement with Beijing during his first administration.
While the Chinese imports of American agricultural products increased slightly after this case, its purchases of American manufactured products decreased in 2020 and 2021 while the pandemic wreaned up on the world supply chains.
In the meantime, some analysts believe that the best strategy in China is to quietly reduce its own imports of targeted American products, such as planes, agricultural products and medical devices.
This could harm the constituencies of powerful republican politicians or industrial groups, such as farmers and the petroleum and gas sector, pending a chance to negotiate a new agreement.
“We do not reduce the possibility of reciprocal prices to come [from China]But we think they are going to be made quietly, “said Chris Beddor, Deputy Research Director of Givekal in China, to avoid attracting the attention of the president of Canada and Mexico, and perhaps the EU .
“Trump is clearly still open to an agreement at some point,” added Beddor, pointing to his postponement of a ban On Tiktok, the short-video platform controlled by Chinese and a call last month with XI.
Economists have said that Trump policies could finally strengthen China’s economy by forcing Beijing to focus on difficult structural reforms, such as the realization of more resources to households rather than infrastructure and industry .
China reported a record overall Trade a surplus of almost 1 tn Last year, the country relied on external demand to compensate for a low indoor economy and a deep slowdown in the real estate sector.
“The irony of the First Trade War,” said Song of ING, which she strengthened the quest for China for “technological self -sufficiency”.
Others, however, warned that the Chinese economy was in a much lower position now. In 2018, the country was able to use the depreciation of the exchange rate, the misappropriation of exchanges and a reduction in the beneficiary margins of exporters to mitigate the prices, said barclays analysts.
“The above channels have all decreased considerably, suggesting a much greater impact on China’s trade this time,” they said.
Visualization of data by Alan Smith and Haohsiang Ko
