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Indebta > News > Exporters ‘shocked and elated’ as China trade cranks back into gear
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Exporters ‘shocked and elated’ as China trade cranks back into gear

News Room
Last updated: 2025/05/14 at 8:52 AM
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Jacob Rothman, who has been making kitchenware in China sold by US retailers including Walmart for more than two decades, was “shocked and elated” when Washington and Beijing reached a truce in their tariff war.

But the co-founder of Velong Enterprises said the deal, under which the US agreed to slash additional tariffs on Chinese goods from 145 per cent to 30 per cent for 90 days, offered little more than a temporary reprieve.

“It’s exactly the percentage that keeps my categories of product viable,” said Rothman of the level of US tariffs on Chinese imports, which is now about 40 per cent. “We’ve gained a bit more breathing room . . . beyond that, it’s uncertain.”

China-based exporters greeted the announcement on Monday of the tariff rollback with relief. Shipments to the US are expected to “significantly increase” in the coming few weeks, according to Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 2,000 Chinese merchants.

The truce, negotiated by US Treasury secretary Scott Bessent and Chinese vice-premier He Lifeng in Geneva over two days of talks last weekend, averted a hard decoupling between the world’s two biggest economies.

Chinese vice-premier He Lifeng, center left, and US treasury secretary Scott Bessent, centre right, met in Geneva © Martial Trezzini/AP

But the uncertainty created by the trade war remained, exporters said, meaning many were still stepping up efforts to diversify production beyond China and seek new markets. “The deal just buys time for both sides to try and readjust,” said Heron Lim, an economist at Moody’s Analytics.

The two sides have 90 days to hammer out a more permanent agreement. Donald Trump’s erratic tariff policy has undermined business confidence in US economic policymaking, according to analysts. Exporters also noted that the reduced tariffs were significantly higher than before Trump took office in January. 

The month-long freeze on shipments, which set in after Trump’s “liberation day” tariffs on April 2 disrupted normal trading patterns, was now beginning to thaw.

Demand for China-US shipping “is basically going to explode” in the short term, said Zhu, a manager at freight agent Greenroad International Logistics who asked to be identified by only one name.

A Shenzhen-based freight agent who asked not to be named said that she expected many clients would stock up in advance of Thanksgiving and Christmas. “Currently, shipping companies have not raised prices, but the trend should be upward,” she added. 

Ken Huo, a supervisor at the Foshan Foreign Trade Association, said some exporters were shipping goods as fast as possible to ensure they arrived within the 90-day timeframe. There was a risk that if talks broke down, shipments could be subject to prohibitive tariffs again, he said.

He said one trader had received an instruction from his boss directly after the joint declaration in Geneva to “immediately ship all stocked goods” to the US. This meant ports in China were already becoming crowded, he added.

But a sense of caution prevails among many exporters.

Wang Xiaosha, general manager at Fujian Jie Ao Industrial, which produces decorative prints and paintings for overseas markets, said that the company “wouldn’t dare” accept US orders until a more permanent deal was in place.

Many of its products were seasonal, and US customers typically chose products at the Canton Fair, which ended this month before the tariff pause. This meant many clients had not placed orders, she said. 

Ren Chaoqun, product manager at Jiangsu-based XStrap, which produces car roof straps and accessories for US clients including Walmart, said the agreement would help ease a backlog of goods that had not yet shipped.

But “tariffs are still a big challenge”, he added. “There is a little bit [of relief]. But the situation is still very severe.”

Wang Chao, at Shenzhen-based cargo business Super Popular Logistics, said that orders from the US fell about 50 per cent in April.

“From April to [early] May the impact was pretty big,” he said. “They only talked it out [at the weekend] . . . so it’s slowly recovering.”

Velong’s Rothman said the longer-term outlook was more complicated. The tit-for-tat trade war has disrupted many customers’ shipping schedules, and uncertainty remained over the ultimate shape of any trade deal.

He added that the truce would slow a shift in his production towards plants in other countries. “It means the migration of production from China to our facilities in Cambodia and India could be just that — a migration, not an evacuation,” Rothman said. 

“We now have about four to five months to ship the next season’s products,” he said. “If negotiations continue to progress, it could mean that our four factories in China — and 20 years of investment — can be preserved.”

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News Room May 14, 2025 May 14, 2025
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