U.S. Increases Tariffs on China by 34%; American Consumer Prices Set to Rise, Chinese Exports Likely to Decrease (AI Translation)

美对华关税再加征34% 美国消费品价格必涨 中国出货缩减

[para. 1][para. 3] The United States has re-imposed tariffs on Chinese goods, significantly impacting the export of consumer products from China. On April 2nd, U.S. President Donald Trump announced "reciprocal tariffs," imposing a 34% additional tariff on China. When combined with the existing 20% tariff, the total tariff rate on Chinese goods is now 54%, effective April 9. This substantial tariff increase has surpassed market expectations and is affecting China's consumer goods industry.

[para. 2] China remains the United States' largest trading partner, with exports reaching $524.656 billion in 2024, accounting for 14.7% of total exports. The primary categories of Chinese exports to the U.S. include electromechanical products, audiovisual equipment, base metals, textiles, clothing, toys, furniture, and lighting fixtures. These industries are particularly impacted by the new tariffs.

[para. 3][para. 4] Since February, the U.S. has imposed two rounds of tariffs on China. Initially, a 10% tariff on Chinese imports came into effect on February 4th, followed by an additional 10% on March 4th, bringing the combined tariff rate to 20%. These tariffs have put pressure on Chinese exports, especially in labor-intensive sectors. In the first two months of 2025, there was a notable year-on-year decrease in Chinese exports of apparel, furniture, footwear, and toys due to the tariff impacts.

[para. 5][para. 6] Chinese businesses affected by the tariffs have tried to absorb the costs through negotiations with American clients, often splitting the burden. For instance, an executive from a handbag company in Guangdong revealed that the tariffs have led to a 45% effective rate in this industry. The tariffs on Cambodian exports to the U.S. have similarly increased significantly.

[para. 7][para. 8] High tariffs have led to a shift in orders from China to other markets like India. Chinese manufacturers are facing pressure as they handle shrinking profit margins. Many businesses are trying to maintain client relationships despite facing potential losses, a challenge exacerbated by the rising tariffs.

[para. 9][para. 10] In response to the tariffs, some Chinese exporters are passing costs onto their American counterparts. However, not all companies are able to do this successfully, leading to complex negotiations. Select exporters with robust bargaining power have managed to make American customers bear the entire tariff cost. Meanwhile, strategic shifts in sourcing by U.S. companies have been observed.

[para. 11][para. 12] Due to tariff uncertainties, U.S. importers are adopting strategies such as "China+1" or "China+N," which involve diversifying supply sources beyond China. This shift is evident in companies like Walmart, which has decreased its reliance on Chinese imports while increasing imports from countries like India. These strategic changes aim to create more resilient supply chains.

[para. 13][para. 14] Some Chinese businesses have attempted to move parts of their production overseas to avoid tariffs, but global tariff increases have complicated these strategies. Tariffs have been levied on several countries, including those where Chinese businesses have relocated production.

[para. 15][para. 16] Chinese companies are striving to mitigate tariff impacts through cost-cutting and exploring new markets. However, transitioning the focus from international exports to domestic sales represents a significant challenge. The Chinese government is encouraging foreign trade entities to tap into domestic markets, but domestic demand and product variety remain barriers.

[para. 17][para. 18] Despite the changing trade landscape, products with technological advantages or well-developed industrial supply chains in China are less susceptible to replacement by other countries. Continuous innovation and industrial upgrading are seen as crucial steps for resisting the negative impacts of the tariffs. U.S. tariffs have led to considerable adjustments in global supply chains and are pushing companies to evaluate their sourcing strategies and cost structures.