In Depth: Despite Slowdown in U.S. Orders, Global Buyers Flock to China’s Biggest Trade Fair

The latest edition of the Canton Fair in Guangzhou, regarded as a vital indicator of global demand for Chinese exports, recently opened amid escalating trade tensions between the U.S. and China. Despite the severe tariff hikes imposed by the U.S.—with some Chinese goods now facing duties as high as 245%—the fair's first phase attracted a record 148,600 overseas buyers, marking a significant 20.2% increase over the previous year. The fair, which is split into three phases, began with a focus on advanced manufacturing sectors, such as machinery and electronics, which comprised nearly 60% of China’s exports in the previous year [para. 1][para. 2][para. 3].

However, the mood was subdued concerning U.S. buyers. Several American firms, wary of increased tariffs, chose not to attend, and many existing Chinese suppliers reported a suspension, rather than cancellation, of U.S. orders. Companies like Foshan Suoer Electronic and Safewell Group, with around 30% of their business tied to American clients, noted that higher tariffs combined with shipping costs made their products less competitive in the U.S. market, especially compared to Brazilian alternatives. Both Chinese exporters and their U.S. partners see the disruption as likely temporary, opting to maintain long-term relationships due to the complexity and stability that characterize the supply chains for machinery and electronics [para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11].

On the American side, buyers acknowledge the high cost and logistical difficulty of switching to alternative suppliers, often noting their dependence on Chinese manufacturing is greater than the other way around. Some predict that the pain inflicted by tariffs could ultimately pressure the U.S. administration to modify its trade policies in the future. President Trump has suggested that tariffs might eventually be reduced but not eliminated [para. 12][para. 13].

Despite substantial U.S. tariffs and efforts to reduce economic reliance on China, complete decoupling remains elusive. Chinese export data reveals continued growth, with exports to the U.S. rising from $478.4 billion in 2018 to $524.7 billion in 2024. Furthermore, China’s share of global exports increased from 11.8% to 14.7%, largely due to diversification into various international markets [para. 13].

The shifting dynamics have also benefited suppliers in emerging markets, especially Latin America. Since the onset of the U.S.-China trade war, importers in countries like Mexico, Brazil, and Peru have increased sourcing of Chinese semi-finished goods, which are then completed or assembled locally. China’s exports of such goods to emerging economies have accelerated, with the compound annual growth rate from 2017-2023 reaching 12% for Vietnam and 16% for Mexico, far outpacing exports to the U.S. Chinese firms are also building new overseas factories, especially in Southeast Asia, to maintain market access for American customers [para. 15][para. 16][para. 17][para. 18][para. 19][para. 20].

Traditional tariff circumvention strategies, such as relocating supply chains and transshipment, are becoming riskier due to new U.S. origin verification rules and stricter enforcement, incurring potential fines and asset freezes for violations. Both buyers and producers are increasingly wary of these risks. Recent reports suggest a trend towards “quasi-transshipment,” where third countries prioritize U.S. demand and fill domestic shortages with Chinese imports—a tactic particularly effective for industries with adaptable supply chains like textiles, home appliances, and light manufacturing [para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27][para. 28].