The recent agreement between the United States and China to lower tariffs has brought a sigh of relief to many Chinese exporters who have been struggling since the trade war began. Under this deal, the hefty 145% tariffs imposed by the Trump administration on most Chinese goods will be reduced to 30% by May 14. In response, China will cut its retaliatory tariffs from 125% to 10% over a 90-day period.
For businesses like a Shanghai-based medical equipment manufacturer, this news is a game changer. The sales manager, Pang Ling, shared that the easing of trade tensions means they can avoid planned job cuts and production line closures. This company relies heavily on the US market, which accounts for about half of its $70 million in annual sales. Pang expressed optimism about the upcoming sales, saying, “Now, we don’t need to let anyone go.”
Many Chinese factories have faced difficulties, halting shipments and reducing working days due to the high tariffs. The situation led to a drop in sales for various products, including those sold on popular e-commerce platforms like Shein and Temu. Sun Yang, who sells face and body painting tools on Temu, celebrated the tariff reduction, noting that his sales had seen significant growth before the tariffs took effect. He hopes that with the new tariff rates, consumer confidence will return, allowing sales to rebound.
Freight forwarders in China are also expecting a surge in orders. Bruce Wen, who operates in Guangzhou, noted that after a quiet April, he anticipates busy ports and increased demand in the coming weeks. Lily Lu, who exports clothing accessories, plans to reach out to her US customers to discuss resuming orders.
However, not everyone is optimistic. Some, like Chen Lei, a supply chain manager for an appliance manufacturer, remain cautious. He pointed out that 90 days is a short time frame for making significant changes in order strategies. There is still uncertainty about how US-China trade relations will evolve.
As the dust settles from this agreement, businesses on both sides are cautiously hopeful. While the reduction in tariffs is a positive step, many are waiting to see how the situation develops in the coming weeks.