Experts: Trump gives escape window, foreign companies hurry to evacuate from China

During the intense trade war between the United States and China, some multinational corporations are taking action in response by either closing their operations in China or transferring their supply chains to other countries. Experts say these companies understand the goals of US President Trump’s tariff war and are using the grace period provided by Trump as a “escape window” to quickly exit China. Continued confrontation with the US will only further damage the Chinese economy.

On April 2, President Trump announced reciprocal tariffs on all countries globally, calling it America’s “liberation day.” Subsequently, from April 9, Trump also announced a 90-day suspension of reciprocal tariffs on over 75 countries (later increased to over 100 countries) while maintaining the 10% base tariff to allow time for trade negotiations between these countries and the US.

According to reports, Apple is utilizing this 90-day grace period to expedite the shift of key industry chains from China to India and Vietnam. Apple plans to produce the majority of iPhones needed for the US market in India, and most MacBooks and iPads in Vietnam. Currently, over 80% of Apple products are manufactured in China.

Dr. Wang Xiuwen, Assistant Researcher at the Institute of CCP Political-Military Relations and Operational Concepts of the Taiwan Institute for National Defense Security Studies, stated that this 90-day period has become a “window of opportunity” for companies to escape China. She emphasized that after Trump’s “liberation day” tariff announcement, many multinational corporations have started closing their operations in China. This 90-day deadline or potential extension has essentially become the “window of opportunity” for firms to withdraw from China.

Dr. Wang believes that large companies like Apple now clearly understand Trump’s tariff war is aimed at the CCP, making it urgent for them to withdraw from China. She highlighted the importance for Apple to swiftly relocate its supply chain from China to prevent a significant drop in market share in the US, which would adversely affect future revenues.

On April 11, the Trump administration granted reciprocal tariff exemptions to some popular consumer electronics products such as smartphones, computers, and chips.

Although this exemption may temporarily ease Apple’s concerns, Professor Yip Yaoyuan at Saint Thomas University’s International Research Seminar believes it will not slow down Apple’s departure from China. Yip stated the uncertainty of the exemption’s duration raises concerns for firms aiming to relocate their supply chains outside of China quickly, as a re-introduction of tariffs could disrupt plans.

The relocation of Apple’s industry chain from China faces obstacles, with reports suggesting strict scrutiny and obstructions by Chinese customs on the transfer of production equipment. Yip mentioned the challenges of moving funds and equipment out of China as major hurdles, adding that these difficulties would increase the costs for companies.

However, Yip Yaoyuan pointed out that if the CCP persistently hinders American companies from leaving China, Trump will continue to escalate tariffs against China. He emphasized that pressuring Trump yields limited results and may lead to further tariff increases.

Dr. Wang also acknowledged that the CCP will attempt to obstruct these moves but doubted their success. She emphasized that Apple, as a multinational corporation focused on profit, would prioritize relocating its supply chain out of China to prevent becoming a casualty in the US-China economic battle.

With Trump’s decision to delay reciprocal tariffs for 90 days on over 100 countries, leaving only the CCP in direct confrontation with the US, the reciprocal tariffs between the US and China have escalated to 145% to 125%.

On April 14, ADM, one of the global “four giants” in the grain trade, announced the closure of its domestic trade business in China.

Yip Yaoyuan expressed that the departure of these American multinational companies from China signifies a disconnect between the US and China, which will have a “destructive impact” on China resulting in a significant spike in unemployment rates. He warned that the continuous rise in unemployment rates could severely harm China, similar to the substantial outflow of foreign investment seen in the past three to four years.

He stressed that if the CCP continues to resist the US, it would bring only negative effects to China, shrinking its international market and potentially leading to factory closures, ultimately sparking “economic panic.”

In an effort to avert an “economic panic,” the CCP’s only recourse would be to initiate large-scale construction projects once again to create domestic demand through government intervention. However, Dr. Wang foresees this posing economic and political challenges for the CCP. She emphasized that if the CCP persists in “fighting to the end,” this year’s economic growth rate is projected to decrease significantly, leading to widespread unemployment, reduced consumer spending, deflation, and potential social unrest challenging the CCP’s authority. With China’s economy already vulnerable and unresolved real estate crises, exacerbated by mass unemployment, sustaining a 5% growth rate seems implausible.