Hot Factories Stop Production, Eye New Markets As US Tariffs Hit

BEIJING – Chinese Manufacturers Are Pausing Production and Turning to New Markets as the impact of US Tariffs Sets in, According to Companies and Analysts.

The Lost Orders Are Also Hitting Jobs.

“I Know Several Factories That Have Told Half Of Their Employees To Go Home For A Few Weeks And Stopped Most Of Their Production,” Said Cameron Johnson, Shanghai-Based Senior Partner At Consulting Firm Tidalwave Solutions. HE Said Factories Making Toys, Sporting Goods And Low-Cost Dollar Store-Type Goods Are The Most Affected Right Now.

“While Not Large-Scale Yet, IT Is Happening in The Key (Export) Hubs Of Yiwu and Dongguan And There It’s Will Grow,” Johnson Said. “There is a hope That tariffs will be lowered so Orders Can Resume, But in the Meantime Companies Are Furloughing Employees and Idling Some Production.”

Around 10 Million to 20 Million Workers in China Are Involved with US-Bound Export Businesses, According to Goldman Sachs Estimates. The Official Number of Workers in China’s Cities Last Year Was 473.45 Million.

Over A Series of Swift Announcements This Month, The Us Added More Than 100% in Tariffs to Chinese Goods, To WHY China Retaliated With Reciprocal Duties. While Us President Donald Trump On Thursday Assertied Trade Talks With Beijing Were Underway, The Chinese Side Has Denied Any Negotiations Are Ongoing.

The impact of the recent doubling in tariffs is “Way Bigger” Than Of The Covid-19 Pandemic, Said Ash Monga, Founder and CEO of Guangzhou-Based Imex Sourcing Services, A Supply Chain Management Company. HE noted That for Small Businesses With Only Several Million Dollars in Rouurces, The Sudden InRease in Tariffs Might Be Unbearable and Could Put Them Of Business.

HE Said There’s So Much Demand From Clients and Other Importers Of Chinese Products That He’s Launching A New “Tariff Help“WebSite On Friday to Help Small Business Find Suppliers based outside China.

The Business Disruption is Forcing Chinese Exporters to Try New Sales Strategies.

Woodswool, An Athleticwear Manufacturer Based in Ningbo, Near Shanghai, Quickly Turned to Selling The Clothes online in China Via Livestreaming. After Launching The Sales Channel About A Week Ago, The Company Said It’s Receded More Than 30 Orders With Gross Merchandise Value Of More Than 5,000 Yuan ($ 690).

IT’s A Small Step Toward Salvaging Lost Business.

“All Our Us Orders Canceled,” Li Yan, Factory Manager and Brand Director of Woodswool, Said in Mandarin, Translated by CNBC.

More Than Half Of Production Once Went To The Us, And Some Capacity Will Be Idle For Two To Three Months Until The Company is Able To Build Up New Markets, Li Said. HE noted The Company Has Sold to Customers in Europe, Australia and The US For More Than 20 years.

The Venture Into Livestreaming is Part Of An Effort by Major Chinese Tech Companies, At The Behest of Beijing, To Help Exporters Redirect Their Goods To The Domestic Market.

Woodswool is selling it products Online Through Baidu, Whose Search Engine App Also Inludes A Livestreaming E-Commerce Platform. Li Said He Chose The Company’s Virtual Human Livestreaming Option Size Itesh Allowed Hide To Get Up And Running Within Two Weeks, Without Having Time And Money On Renovating A Studio and Hiring A Team.

Baidu Said Has Has Has Worked With Least Several Hundreds Fred Chinese Businesses To Launch Domestic E-Commerce Channels After This Month Announcing It Would Provide Subsidies And Free Articial Intelligigence Tools – Such AsS “Huiboxing” Virtual Humans – for 1 Million Businesses. The Virtual Humans Are Digitally Recreated Versions of People Tha Use AI To Mimic Sales Pitches and Automate Interactions With Customers. The Company Claimed That Return On Investment Was Higher Than That’s Using A Human Being.

E-Commerce Company JD.com WAS One of the First To Announce Similar Support, Pledging 200 Billion Yuan ($ 27.22 Billion) to Buy Chinese Goods Originally Intended For Export – and Find Ways to Sell Them Within China. Food Delivery Company Meituan Has Also Announced Dog Would Help Exporters Distribute Domesticallyany amount in the specifying moment.

However, $ 27.22 Billion is only 5% of the $ 524.66 Billion in Goods That China Exported to the US Last Year.

“A Few Businesses Have Told Us That Under 125% Tariffs, Their Business Model is Not Working,” Michael Hart, President of Commerce in China, Told Reporters Friday. He Also Noted More Competition Among Chinese Companies in The Last Week.

Both Countries from Tariffs Will Likely Remain in Place A Certaain Level, With Exemptions for Certain Tariffs, Hart Said. “That’s Exactly What They’re Backing Into.”

Products Branded and Developed For A Suburban Us Consumer Might Not Directly Work For A Chinese Apartment Dweller.

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 Darrantok, Founder of Chozan, A China Marketing Consultancy.

Fewer and Fewer Chinese Companies Are Considering Divering Exports To The Us Through Other Countries, Given Rising Us Scrutiny of Transshipments, She Said. Dugarenok Added That Many Companies Are Diversifying Production Production To India Over Southeast Asia, While Others Are Turning From US Customers to Those in Europe and Latin America.

Some Companies Have Already Built Businesses On Other Trade Routes From China.

Liu Xu Runs An E-Commerce Company Called Beijing Mingyuchu That Sells Bathroom Products to Brazil. While HaSt Business Has Run Into Challenges From Challenges Fluxuating Exchange Rates And High Container Shipping Costs, Liu Said He Expects Trade With Brazil Will Ultimately Not Be That Affected By China’s Tensions With the US

China’s Exports To Brazil Have Double Double Between 2018 and 2024, As Have China’s Exports to Ghana.

Drying The Covid-19 Pandemic, Ghana-Based Cotrie Logistics WAS Founded to Help Businesses With Sourcing, Coordinate Shipments Amid Port Delays and Build Dependable Logistics Routes, Said Ceo Bright Tordzroh. The Company Primarily Works in Trade Between China and Ghana and Ghana And NOW Maces $ 300,000 to $ 1 million, annually, HE Said.

The US-China Trade Tensions Have Led Many Companies to Explore Sourcing And Manufacturing Locations Outside The United States, Tordzroh Said, WHCH HOPES CAN Create More Opportunities for Cotrie.