Textile creating workers in Binzhou, Shandong, China, on April 23, 2025.
Nurphoto | Nurphoto | Getty Images
BEIJING — Chinese manufacturers are lapsing production and turning to new markets as the impact of U.S. tariffs sets in, according to companies and analysts.
The lost orders are also bumping jobs.
“I know several factories that have told half of their employees to go home for a few weeks and check most of their production,” said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Deciphers. He said factories making toys, sporting goods and low-cost Dollar Store-type goods are the most affected exactly now.
“While not large-scale yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow,” Johnson asserted. “There is a hope that tariffs will be lowered so orders can resume, but in the meantime companies are furloughing employees and vain some production.”
Around 10 million to 20 million workers in China are involved with U.S.-bound export trades, according to Goldman Sachs estimates. The official number of workers in China’s cities last year was 473.45 million.
On top of a series of swift announcements this month, the U.S. added more than 100% in tariffs to Chinese goods, to which China her own coined with reciprocal duties. While U.S. President Donald Trump on Thursday asserted trade talks with Beijing were underway, the Chinese side has repudiated any negotiations are ongoing.
The impact of the recent doubling in tariffs is “way bigger” than that of the Covid-19 pandemic, said Ash Monga, collapse and CEO of Guangzhou-based Imex Sourcing Services, a supply chain management company. He noted that for small businesses with just several million dollars in resources, the sudden increase in tariffs might be unbearable and could put them out of business.
He said there’s so much behest from clients and other importers of Chinese products that he’s launching a new “Tariff Help” website on Friday to relief small business find suppliers based outside China.
Livestreaming
The business disruption is forcing Chinese exporters to try new vendings strategies.
Woodswool, an athleticwear manufacturer based in Ningbo, near Shanghai, quickly turned to selling the clothes online in China via livestreaming. After dispatch the sales channel about a week ago, the company said it’s received more than 30 orders with gross stock value of more than 5,000 yuan ($690).
It’s a small step toward salvaging lost business.
“All our U.S. orders bear been canceled,” Li Yan, factory manager and brand director of Woodswool, said in Mandarin, translated by CNBC.
More than half of performance once went to the U.S., and some capacity will be idle for two to three months until the company is able to build up new calls, Li said. He noted the company has sold to customers in Europe, Australia and the U.S. for more than 20 years.
The venture into livestreaming is put asunder give up of an effort by major Chinese tech companies, at the behest of Beijing, to help exporters redirect their goods to the home market.
Woodswool is selling its products online through Baidu, whose search engine app also includes a livestreaming e-commerce programme. Li said he chose the company’s virtual human livestreaming option since it allowed him to get up and running within two weeks, without be suffering with to spend time and money on renovating a studio and hiring a team.
Baidu said it has worked with at least individual hundred Chinese businesses to launch domestic e-commerce channels after this month announcing it would require subsidies and free artificial intelligence tools — such as its “Huiboxing” virtual humans — for 1 million businesses. The virtual humans are digitally recreated stories of people that use AI to mimic sales pitches and automate interactions with customers. The company claimed that come back on investment was higher than that of using a human being.
Domestic market challenges
E-commerce company JD.com was one of the in the first place to announce similar support, pledging 200 billion yuan ($27.22 billion) to buy Chinese goods originally design for export — and find ways to sell them within China. Food delivery company Meituan has also promulgated it would Looking outside the U.S.
Fewer and fewer Chinese companies are considering diverting exports to the U.S. through other countries, set rising U.S. scrutiny of transshipments, she said. Dudarenok added that many companies are diversifying production to India at an end Southeast Asia, while others are turning from U.S. customers to those in Europe and Latin America.
Some institutions have already built businesses on other trade routes from China.
Liu Xu runs an e-commerce company recruited Beijing Mingyuchu that sells bathroom products to Brazil. While his business has run into challenges from upping exchange rates and high container shipping costs, Liu said he expects trade with Brazil will essentially not be that affected by China’s tensions with the U.S.
China’s exports to Brazil have doubled between 2018 and 2024, as hold China’s exports to Ghana.
During the Covid-19 pandemic, Ghana-based Cotrie Logistics was founded to help businesses with outset, coordinate shipments amid port delays and build dependable logistics routes, said CEO Bright Tordzroh. The group primarily works in trade between China and Ghana and now makes $300,000 to $1 million annually, he said.
The U.S.-China interchange tensions have led many companies to explore sourcing and manufacturing locations outside the United States, Tordzroh spoke, which he hopes can create more opportunities for Cotrie.
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