China’s Workers, Companies Fear Economic Crisis As Beijing Vows To ‘Fight To The End’ On US Tariffs

Authored by Leo Timm via The Epoch Times (emphasis ours),

People and businesses across China are feeling the pressure as the Chinese authorities vow staunch resistance to the United States and the Trump administration’s tough approach to trade and bilateral relations.

Chinese companies, workers, and industry insiders have reported being caught in a bind by the escalating U.S. tariffs, as usual orders are not coming in, and some companies are being compelled to take extreme measures.

While Chinese social media is flooded with anti-U.S. propaganda and nationalist content, posts and videos warning of mass layoffs and prolonged “vacations” offer some indication of the unease spreading throughout an export-driven economy already struggling with high unemployment, shrinking profits, and declining foreign investment.

On April 11, U.S. President Donald Trump hiked the blanket tariff on most Chinese products to 145 percent in response to the Chinese regime slapping its own 125 percent retaliatory duty on American goods the same day.

In addition, Beijing on April 14 restricted the export of seven types of rare earth products critical for high-tech and military manufacturing in the United States and other countries.

According to a White House fact sheet published on April 15, some Chinese products may now face U.S. tariffs of up to 245 percent.

Trump has cited unfair trade practices and illegal drug trafficking as reasons for imposing the levies on Chinese goods.

Washington, particularly starting with the first Trump administration, has long called out the Chinese regime for decades of distortionary and protectionist economic policies, as well as rampant industrial espionage.

Trump also criticized Beijing for failing to curb the production and export of the deadly synthetic opioid fentanyl, which often entered the United States through Mexico.

The U.S. Drug Enforcement Administration said in a December 2024 press release that more than 107,000 people died from drug overdose in 2023, with nearly 70 percent of those deaths linked to opioids such as fentanyl.

Chinese Companies Feel the Crunch

Li Meng-chü, a Taiwanese businessman, told the Chinese edition of The Epoch Times that the heightened U.S. tariffs will force a significant number of export-oriented factories in China to scale back their businesses or close entirely.

The owner of a factory that makes flashlights in the city of Yiwu, Zhejiang Province, told The Epoch Times that while export companies used to place three or four bulk orders with the factory a month, business has completely dried up as of late. Many workers who used to work six days a week now take three or four days off.

Li, the Taiwanese businessman, said that to his knowledge, factories in the southern Chinese province of Guangdong that produce electronics, garments, and lighting that had U.S. orders placed through to the end of the year, have now seen those orders abruptly canceled. Much stock has been left sitting in the factories.

The South China Morning Post, a Hong Kong-based English-language outlet, reported on April 10 that some Chinese exporters have opted to surrender their cargo to the shipping companies mid-voyage rather than deal with the new tariffs.

“No one will buy them after the tariffs are imposed,” the publication quoted one client as saying to a Chinese exporter.

Mainland Chinese outlet Caixin reported that the port of Shanghai—normally bustling with ships—was virtually empty on the day after the United States imposed its 145 percent tariff. The outlet expects U.S.–China shipping to fall by half in the near future.

In the wake of the tariff hikes, Chinese fashion giant Shein attempted to shift some of its production out of China, but was barred from doing so by the Chinese authorities.

Shein and Temu, another Chinese online retailer, will see price hikes following the cancellation of the de minimis shipping exemption, which allows packages containing goods worth $800 or less to be imported duty-free to the United States.

The restriction is set to apply to mainland China and Hong Kong starting on May 2, affecting about 11 percent of current U.S.–China trade.

Beijing Doubles Down

On April 8, a day before the Trump administration put a 90-day pause on tariff hikes targeting scores of countries worldwide, Beijing’s commerce ministry said it would “fight to the end” with the United States on trade.

The Chinese commerce ministry said China’s retaliatory actions were a “completely legitimate” means of protecting national interests and “maintaining the normal international trade order.”

Introducing a 28,000-word white paper on U.S.–China trade, a commerce ministry official said on April 9 that Beijing “possesses resolute determination and a wide range of measures” to counter American tariffs and other economic and trade restrictions.

In a regular press conference held April 10, Chinese foreign ministry spokesman Lin Jian said that Beijing “is not scared” of fighting a trade war.

Tough Times Ahead

Meanwhile, Chinese businessmen and bloggers have questioned where the Chinese Communist Party’s (CCP) obstinacy and propaganda will lead them.

According to an early April report by a mainland Chinese blog called “Logistics and Supply Chain Management,” a furniture factory owner in Jiangsu Province, eastern China, calculated that with all the additional fees, a tariff of just 20 percent would consume the factory’s entire profit.

Liu Ming, director of an electronics factory in the Jiangsu city of Suzhou, who used a pseudonym, told the blog that while the company had a profit margin of 16 percent in 2024, “now that the tariffs have been applied, we are operating at a loss.”

Posting on social media platform X, a Chinese exporter who works with American clients said that when the tariff was still 34 percent, it was still possible to work with the raised rate, but the 125 percent tariff “amounts to wiping out Chinese workers’ jobs.”

“As far as I know, nearly all U.S. importers have stopped shipments from China,” he said.

A worker in Dongguan, Guangdong Province, said in an April 9 video posted to Chinese social media that with tariffs eliminating all profit margins from those exporting to the United States, factories and suppliers will be compelled to compete with each other in the domestic Chinese market.

“It’s going to be a race to the bottom,” he said. While not directly criticizing how the CCP handled the trade disputes, he called out Chinese netizens who “spend all day on the internet talking about fighting [the trade war] ‘at all costs.’”

“I bet you’ll soon find yourselves among those ‘costs,’” he added.

A vlogger in Nanjing, the capital of Jiangsu Province, said earlier this month on social media that the Chinese market’s ability to absorb the country’s consumer products would not be enough for a significant number of workers to keep their jobs.

“Many companies engaged in foreign trade are sure to cut production,” the vlogger said.

A finance worker in Xiamen, a coastal Chinese city in Fujian Province, warned on April 9 that the export business coming to a standstill would have far-reaching effects beyond manufacturing and logistics. “Don’t quit your job, keep it if you can,” she said in a social media post.

‘A Series of Traps’

China expert and current affairs commentator Wang He told The Epoch Times that the CCP may not have anticipated Trump’s move to pause the raft of global reciprocal tariffs he announced on April 2.

“The CCP wanted to take the opportunity to form an anti-U.S. united front” with countries around the world affected by the U.S. tariffs, only to be the odd one out in refusing to negotiate, he said. “As a result, communist China walked into a series of traps that Trump set for it.”

Earlier, on April 9, while at a White House event, Trump had expressed confidence that “China wants to make a deal.” However, he added, “It’s one of those things they don’t know quite—they’re proud people.”

Speaking on April 15 at a press briefing, White House press secretary Karoline Leavitt said that “the ball is in China’s court” as far as talks go.

“China needs to make a deal with us. We don’t have to make a deal with them,” Leavitt said, noting that she was quoting the president.

On April 17, Trump told reporters at the White House that China had contacted his administration.

“I believe we’re going to have a deal with China, and if we don’t, we’re going to have a deal anyway, because we will set a certain target, and that’s going to be it,” the president said.