Chinese exporters are making urgent adjustments in response to significant U.S. tariffs by increasing prices, canceling shipments, and redirecting goods to other countries, as economic tensions rise between the world’s largest economies. On Wednesday, the U.S. President announced a 90-day suspension of new tariffs for most countries, while maintaining a 104% tariff on China and imposing an additional 21% to penalize Beijing for retaliating.
In reaction, Chinese sellers on e-commerce platforms are elevating prices by as much as 70% for U.S. consumers. Many are also considering exiting the U.S. market due to the unsustainable nature of trade amid punitive tariffs, according to a prominent Chinese e-commerce association.
Wang Xin, President of the Shenzhen Cross-Border E-Commerce Association, representing over 2,000 Chinese sellers, stated that these exporters are unable to bear the additional financial burden imposed by the U.S. tariff increases. Wang also highlighted the severe challenges his members face as they sell products in the U.S. through platforms like Amazon, Shein, and Temu.
A seller based in Guangzhou indicated that some peers have been establishing factories in other countries, like Jordan, to complete production and then re-export to the U.S. Others have tried rerouting goods through countries with U.S. trade agreements. However, uncertainties persist for Chinese manufacturers relocating production, especially after the U.S. administration suggested extending tariffs beyond China.
Currently, most Chinese merchants are adopting a cautious approach. Hu Jianlong, CEO of Brands Factory, an e-commerce insights platform, mentioned the difficulty of making long-term plans under such volatile circumstances. Shipping companies have reported numerous order cancellations and anticipate further disruptions.
A Shanghai freight industry insider noted that a significant number of orders are being withdrawn due to the unpredictability of the situation. They reported holding up a new order of about 100 containers intended for Houston due to the fluid nature of events.
Additionally, there are indications of trade reversals, with China’s retaliatory tariffs affecting U.S. exports. An example is a canceled shipment of U.S. gas due to increased Chinese tariffs. The U.S. also exports various agricultural products, machinery, and other goods to China.
On Thursday, China enacted additional 84% tit-for-tat tariffs against the U.S., raising the total tariffs on American imports to over 100%. While President Xi Jinping’s administration signaled a firm stance against escalating trade tensions, there was no immediate matching of the U.S.’s higher tariffs.
China’s commerce ministry stated a willingness to engage in dialogue based on equality and mutual respect but affirmed readiness to continue battling if necessary. The renminbi declined to its weakest since 2007, indicating Beijing’s tolerance for gradual currency depreciation in reaction to U.S. tariffs. It fell to Rmb7.351 against the dollar on Thursday before correcting slightly.
The U.S. Treasury Secretary, Scott Bessent, cautioned China against currency devaluation. Concurrently, Beijing engaged in diplomatic dialogues with the European Commission’s trade commissioner Maroš Šefčovič and Malaysia’s trade minister Zafrul Aziz, emphasizing its intent to maintain the multilateral trading system with partners like Asean.
Following the U.S. President’s announcement, American stock markets saw a rise, with the S&P 500 closing up 9.5%. The positive trend continued into Thursday, with Japan’s Topix, Taiwan’s Taiex, Europe’s Stoxx 600, Germany’s Dax, and the FTSE 100 experiencing gains. In contrast, Chinese stock indices showed limited responses but still ended the day higher, potentially influenced by government-backed institutions.
Reporters contributing to the story include Robin Harding, Chan Ho-him, and Arjun Neil Alim in Hong Kong; Joe Leahy and Eleanor Olcott in Beijing; Thomas Hale in Shanghai; Laura Onita and Oliver Telling in London; and Harry Dempsey in Tokyo.
