Trump Imposes Additional 10% Tariffs on China, Chinese Companies in Panic

After President Trump announced last week that a 10% tariff would be imposed on Chinese goods starting 4th March, many businesses in China immediately found themselves in a state of panic. They turned to professional organizations seeking advice on how to tackle this new development. Numerous industry players expressed that the additional 10% tariff imposed by Trump would only double their pain and hinted at more suffering in the future.

On 27th February, President Trump stated that starting from 4th March, an extra 10% tariff would be levied on imported goods from China, citing the continued influx of deadly fentanyl drugs from China into the United States. The Trump administration had already imposed a 10% tariff on Chinese goods on 4th February, bringing the total tariff to 20%.

According to a report by The Wall Street Journal on 3rd March, just hours after Trump’s announcement of the additional 10% tariff on China, on the morning of 28th February Beijing time, lawyer Cui Shu in Xiamen suddenly received numerous phone calls and messages from clients seeking urgent advice on how to deal with the latest U.S. tariff plan.

One of Cui Shu’s clients is a manufacturer of power transformers, who has already been in the process of shifting their production operations to Malaysia. Another client is an automotive parts manufacturer considering moving their manufacturing business to Thailand. Both companies made emergency requests, hoping that Cui Shu could assist in expediting this process.

In an interview, Cui Shu mentioned that companies are all in a state of panic and are actively looking for solutions. Many Chinese manufacturers believed they could withstand the impact of the 10% tariff imposed by the Trump administration in early February. However, the additional 10% tariff means their pain will be doubled, signaling that more hardship could be on the horizon.

Trump’s tariff war has pushed Chinese manufacturers to ramp up plans to shift production operations overseas, particularly to Southeast Asia. Cui Shu noted that he has two suggestions for clients: diversify their customer base to reduce reliance on the U.S. and relocate production to mitigate tariff risks.

Ken Huo, who works as a consultant in the manufacturing industry in Foshan, Guangdong, and is a member of the Foshan Furniture Manufacturers Industry Association, shared that small-scale manufacturers in China are facing tough times as they lack the resources to make large-scale investments, such as building new factories in Southeast Asia.

He mentioned that after the latest tariff statement from the U.S., his WeChat was flooded with messages from local business owners expressing confusion and panic. “The worst part is, we really don’t know what the Trump administration will do next regarding tariff issues,” Huo said.