The China Mail - Trump tariffs shake up China's factory heartland

USD -
AED 3.672504
AFN 67.695851
ALL 82.775385
AMD 377.841273
ANG 1.789783
AOA 917.000367
ARS 1317.235277
AUD 1.546073
AWG 1.80125
AZN 1.70397
BAM 1.668131
BBD 1.991983
BDT 120.269521
BGN 1.66862
BHD 0.375965
BIF 2950.147128
BMD 1
BND 1.275108
BOB 6.834407
BRL 5.422204
BSD 0.98904
BTN 86.494094
BWP 13.299501
BYN 3.331144
BYR 19600
BZD 1.984221
CAD 1.38335
CDF 2866.000362
CHF 0.808124
CLF 0.024472
CLP 960.023882
CNY 7.16775
CNH 7.17073
COP 3986.609237
CRC 498.869888
CUC 1
CUP 26.5
CVE 94.046654
CZK 20.923204
DJF 176.118385
DKK 6.36904
DOP 61.699859
DZD 129.134718
EGP 48.361977
ERN 15
ETB 140.270374
EUR 0.853104
FJD 2.261504
FKP 0.739948
GBP 0.745295
GEL 2.69504
GGP 0.739948
GHS 10.903663
GIP 0.739948
GMD 72.503851
GNF 8574.352851
GTQ 7.584119
GYD 206.831848
HKD 7.81505
HNL 25.873172
HRK 6.427704
HTG 129.412768
HUF 337.340388
IDR 16233.5
ILS 3.368604
IMP 0.739948
INR 87.33025
IQD 1295.407054
IRR 42050.000352
ISK 122.380386
JEP 0.739948
JMD 158.548339
JOD 0.70904
JPY 146.95904
KES 127.732526
KGS 87.427404
KHR 3966.05399
KMF 422.503794
KPW 899.919971
KRW 1384.203789
KWD 0.30539
KYD 0.824172
KZT 531.638876
LAK 21432.896925
LBP 88998.763273
LKR 298.486076
LRD 198.302699
LSL 17.449529
LTL 2.95274
LVL 0.60489
LYD 5.36654
MAD 8.951085
MDL 16.659986
MGA 4379.717685
MKD 52.488379
MMK 2099.225378
MNT 3595.593607
MOP 7.965883
MRU 39.442194
MUR 46.110378
MVR 15.410378
MWK 1714.955862
MXN 18.59755
MYR 4.227504
MZN 63.903729
NAD 17.449529
NGN 1535.370377
NIO 36.393876
NOK 10.05555
NPR 138.39055
NZD 1.719543
OMR 0.383402
PAB 0.98904
PEN 3.472643
PGK 4.180136
PHP 56.499504
PKR 280.587658
PLN 3.639046
PYG 7167.896286
QAR 3.605015
RON 4.310604
RSD 99.944561
RUB 79.832829
RWF 1431.617553
SAR 3.752303
SBD 8.217016
SCR 15.053947
SDG 600.503676
SEK 9.498104
SGD 1.281204
SHP 0.785843
SLE 23.303667
SLL 20969.49797
SOS 565.226662
SRD 38.108504
STD 20697.981008
STN 20.896413
SVC 8.653674
SYP 13002.217038
SZL 17.442108
THB 32.405038
TJS 9.445264
TMT 3.5
TND 2.904004
TOP 2.342104
TRY 41.175038
TTD 6.715851
TWD 30.382304
TZS 2467.653205
UAH 40.877308
UGX 3524.244104
UYU 39.583778
UZS 12277.709071
VES 137.956904
VND 26350
VUV 120.474631
WST 2.711602
XAF 559.475457
XAG 0.02571
XAU 0.000297
XCD 2.70255
XCG 1.782507
XDR 0.695808
XOF 559.475457
XPF 101.718623
YER 240.203589
ZAR 17.44912
ZMK 9001.203584
ZMW 22.870911
ZWL 321.999592
  • RBGPF

    1.6300

    75.55

    +2.16%

  • GSK

    0.1100

    40.19

    +0.27%

  • RELX

    0.2500

    48.44

    +0.52%

  • SCS

    0.4000

    16.5

    +2.42%

  • NGG

    -0.0200

    71.41

    -0.03%

  • BTI

    -0.7600

    58.51

    -1.3%

  • CMSD

    0.2400

    23.95

    +1%

  • BP

    0.6900

    34.74

    +1.99%

  • CMSC

    0.3000

    23.75

    +1.26%

  • RIO

    1.3900

    62.69

    +2.22%

  • RYCEF

    0.1300

    14.29

    +0.91%

  • JRI

    0.1200

    13.45

    +0.89%

  • AZN

    0.5100

    80.97

    +0.63%

  • BCC

    6.5500

    91.22

    +7.18%

  • VOD

    0.0600

    11.92

    +0.5%

  • BCE

    -0.2300

    25.49

    -0.9%

Trump tariffs shake up China's factory heartland
Trump tariffs shake up China's factory heartland / Photo: © AFP

Trump tariffs shake up China's factory heartland

In a drab office in China's industrial heartland, Andy Xiao frets over the future of his shoe materials business, now straining under sweeping tariffs imposed by Donald Trump.

Text size:

The US president has targeted friend and foe alike since taking office a month ago, notably slapping additional 10 percent duties on products imported from China.

The move could affect hundreds of billions of dollars in trade and may worsen if the mercurial magnate follows through on his threats of even higher customs levies.

But for Xiao, the policy is already having "a major impact" on his firm, Weida New Materials.

Based in the southern city of Dongguan, the company makes artificial leather for shoe manufacturers, many of whom export to the United States.

The model leaves him vulnerable to downturns in shipments, a distinct possibility as Trump looks to upend trade rules.

"This has put a lot of pressure on us in China, and factories are also under pressure," said Xiao, adding that some shoe manufacturers have already requested lower prices in response to the new tariffs.

"There are definitely some concerns" about further hikes, he said, "but that is a matter of national policy –- it's not up to us".

Xiao said that if exports run into insurmountable hurdles, Weida may be forced to change its business model.

"If there is business (in the United States), we'll do it. If not, we can find other business domestically. We're not just targeting a single overseas customer, are we?"

Many suppliers in Dongguan -- home to a dense concentration of garment exporters -- have migrated operations to Southeast Asia in recent years, seeking lower labour costs and less stringent customs duties as trade frictions between Beijing and Washington persist.

But Xiao, who entered the industry in 2014, said he had resisted the trend as many companies ended up struggling with unforeseen challenges like getting paid for shipments on time.

"Firms have migrated in recent years, but feedback of many people that went there wasn't very good," said Xiao.

"They encountered many difficulties," he said, such as obstacles in settling payments with currencies other than China's yuan.

"The risks are great."

- When the levy breaks -

In a factory complex in the city of Guangzhou, rows of staff bend over clattering sewing machines, churning out heaps of clothes for bargain-seeking American online shoppers.

The workshops are among thousands to see orders surge in recent years by supplying hyper-efficient e-commerce platforms Shein and Temu, which have taken the United States by storm.

Those brands have built their models largely on a US policy known as the de minimis exemption, which allows goods with a value of $800 or less to enter the country duty free.

Trump has said the 10 percent tariff will also apply to those products –- but imports have continued as usual while authorities figure out the logistics of taxing the torrent of shipments.

Still, Zhu, a factory production manager in his late thirties whose company exports to the United States, said he was "relatively optimistic" about business prospects.

Zhu said he had noticed a significant uptick in orders in recent years, as the new low-cost e-commerce giants amass huge customer bases in developed countries.

"If you think about it, the United States definitely will not produce its own clothing," he said.

"They have become used to relying on manufacturing in Southeast Asia and China... so future prospects for the processing industry are still pretty good," he told AFP.

- No Trump slump, yet -

China has stated "resolute opposition" to Trump's fusillade of tariffs, responding with reciprocal measures and warning of further moves to protect its economic interests.

Beijing is battling long-term economic problems of its own, with slowing growth adding to a debt crisis in the property sector, low consumption and high youth unemployment.

The country's southern export belt provides jobs to millions of people, many of them migrants from deprived rural areas.

But workers in an area unofficially dubbed "Shein town" mostly shrugged off the tariffs -- at least while their impact remains bearable.

"Production is busy so we just focus on that," said Peng, Zhu's coworker, adding that it was a matter for senior management.

Zhong, a manager at a clothing factory in the nearby city of Zhongshan, told AFP while perusing local job boards he was not worried about trade frictions with the United States.

The manufacturing hub where he works has also been bustling in recent years, Zhong said, adding that he had come to "Shein town" to compare employment scenes.

"I think our government will be able to respond and figure out a solution," he told AFP, as hundreds of workers behind him walked back to the factories for afternoon shifts.

G.Fung--ThChM