Chinese factories stop production, eye new markets as U.S. tariffs hit

Beijing – Chinese manufacturers are stopping production and resorting to new markets as it establishes the impact of US tariffs, according to companies and analysts.

Lost orders are also reaching jobs.

“I know several factories that have told half of their employees who go home for a few weeks and stop most of their production,” said Cameron Johnson, main partner of the Tidalwave Solutions consulting consulting. He said that factories make toys, sporting articles and low -cost store items in dollars are the most affected at this time.

“While not yet on a large scale, it is happening in the key [export] Yiwu and Dongguan hubs and there is a group that will grow, “said Johnson.” There is hope that tariffs will be reduced to resume orders, but in the meantime companies are despising employees and inacting some production. “

Around 10 million to 20 million workers in China are involved with export companies bound for the United States, Childman Sachs estimates. The official number of workers in the cities of China last year was 473.45 million.

On a series of fast ads this month, the United States added more than 100% in tariffs to Chinese products, which China represents with reciprocal drafts. While the president of the United States, Donald Trump, said Thursday that commercial conversations with Beijing were underway, the Chinese side has denied that any negotiation is ongoing.

The impact of the recent duplication on rates is “much greater” than that of the Covid-19 pandemic, said Ash Monga, founder and CEO of Imex Sourcing Services, a supply chain management company. He pointed out that for small businesses with only several million dollars in resources, the sudden increase in rates could be unbearable and could leave the company.

He said that there is so much demand from customers and other importers of Chinese products that is launching a new “Rate Help” website on Friday to help small businesses find head suppliers in China.

Business interruption is forcing Chinese exhibitors to test new sales strategies.

Woodswool, a sportswear manufacturer with headquarters in ningbo, near Shanghai, quickly turned to sell online clothes in China through live broadcast. After launching the sales channel about a week ago, the company said it received more than 30 orders with a gross merchandise value of more than 5,000 yuan ($ 690).

It is a small step towards the recovery of lost businesses.

“All our American orders have canceled,” said Li Yan, factory manager and Woodwool brand director, in Mandarin, translated by CNBC.

More than half of the production once went to the US. UU., And some capacity will be inactive for two or three months until the company can build new markets, Li said. He pointed out that the company has sold customers in Europe, Australia and the US for more than 20 years.

The company in live broadcast is part of an effort of the main Chinese technology companies, at the request of Beijing, to help exporters redirect their goods to the domestic market.

Woodswool is selling its online products through Baidu, whose search engine application also includes a live electronic commerce platform. Li said he chose the company’s virtual prolongation option, since it allowed him to put himself into operation in two weeks, without having to spend time and money to renew a study and hire a team.

Baidu said that he has worked with at least several hundred Chinese companies to launch national electronic commerce channels after this month would announce that he would provide free artificial intelligence subsidies and tools, as of humans of humans of 1 Alito for 1. Virtual humans digitally recreate versions of people who use AI to imitate sales arguments and automate interactions with customers. The company said the return on investment was higher than using a human being.

The electronic commerce company JD.com was one of the first to announce similar support, promising 200 billion yuan ($ 27.22 billion) to buy Chinese products originally destined to export and find ways to sell them within China. The Meitan food delivery company has also announced that it would help exporters to distribute nationwide, without specifying an amount.

However, $ 27.22 billion are only 5% of the $ 524.66 billion in goods that China exported to the United States last year.

“Some companies have told us that less than 125% of rates, their business model is not viable,” Michael Hart, president of the US Chamber of Commerce in China on Friday, told reporters. Hello, he also noticed more competition among Chinese companies in the last week.

The tariffs of both countries will probably remain in force at a certain level, with exemptions for certain rates, Hart said. “That is exactly what they are supporting.”

The products marked and developed for a US suburban consumer. UU. You may not direct the work for a Chinese apartment inhabitant.

The manufacturers have gone directly to Chinese social media platforms Red Note and Douyin, the local version of Tiktok, to ask consumers to support them, but fatigue is growing, he told Ashley Doubarenok, founder of Clayan, a Chinese marketing consultant.

Less and fewer Chinese companies are considering diverting exports to the US. Through other countries, given the increase in the scrutiny of trans shipments, he said. Doubarenok added that many companies are diversifying production to India over Southeast Asia, while others are going from American customers to those in Europe and Latin America.

Some companies have already created businesses on other commercial routes in China.

Liu Xu directs an electronic commerce company called Beijing Mingyuchu that sells bath products to Brazil. While your business has encountered the fluctuating exchange rates and high container shipping costs, Liu said it hopes that trade with Brazil will not be affected by China’s tensions with the United States.

China’s exports to Brazil have doubled between 2018 and 2024, as well as China’s exports to Ghana.

Duration The Covid-19 Pandemia, Cotrie Logistics, based in Ghana, was founded to help companies with the supply, coordinate shipments in the midst of delays in the ports and build reliable logistics routes, said CEO Bright Tordzroh. The company works mainly in trade between China and Ghana and now wins $ 300,000 to $ 1 million annually, Hey said.

Commercial tensions between the United States and China have led many companies to explore supplies of supply and manufacturing outside the United States, Tordzroh said, that hopes can create more opportunities for Cotrie.