US Tariffs Take Toll On Chinese Factories

Factories across China are pulling back on output and sending workers home as a result of fresh trade restrictions from the United States, with American buyers cancelling or suspending orders.

A growing number of manufacturers say they have been forced to cut hours or halt production altogether due to the sharp rise in tariffs imposed under President Donald Trump. With most Chinese goods now facing duties of at least 145 per cent, the impact is beginning to show on shop floors across the country.

Roughly 15 per cent of China’s exports last year were bound for the US. That flow is now under pressure. Interviews and social media posts by workers reveal a marked slowdown, with pictures of empty production lines and notices of temporary shutdowns spreading online.

Staff at factories making items as varied as shoe soles, jeans, electrical fittings, and portable cooking units said production had stopped for periods lasting a week or longer. Overtime and weekend shifts have been widely cut.

Wang Xin, who heads the Shenzhen Cross-Border E-Commerce Association, said many of the group’s 2,000 members had urged suppliers to pause or delay shipments due to weakened demand. As a result, some factories have suspended operations for up to two weeks.

Three recruiters working with factories in Guangdong said many firms were scaling back hours, although full shutdowns were mainly limited to businesses that rely heavily on the American market.

“Our export orders dried up, so we’ve stopped production for now,” said a 28-year-old employee at a plastics plant in Fujian province. Her factory had already been idle for a week, she said, and there was no sign of improvement.

At DeHong Electrical Products in Dongguan, Guangdong, management has put workers on a month’s leave, paying only minimum wage. In a company notice seen by the Financial Times, DeHong said it was under “significant near-term pressure” and was looking at ways to cut costs and find new markets. The company declined to comment further.

In Zhejiang province, medical equipment maker Hangzhou Stellarmed, which specialises in endoscopy kits for the US market, has told employees to use the rest of April to look for alternative work. It is also providing access to a recruitment agency. “We’ve no idea how long this will go on,” said the firm’s owner, giving only the surname Shi. “We just have to wait.”

Dongguan Yuanguan Technology, a manufacturer of plastic moulds, has stopped all weekend overtime. A company notice and a staff member confirmed the move was directly tied to the impact of US tariffs. The firm did not respond to further queries.

In Zhejiang, a 26-year-old worker at a toy factory said US customers were their main buyers. With orders stalled, staff were sent home for two weeks. “It’s tough right now,” he said, declining to be named.

It is still unclear how widespread the suspensions are, but the effects are becoming harder to ignore. Han Dongfang, who founded China Labour Bulletin, said the disruption would have long-term consequences. “The reshaping of China’s manufacturing sector will take years. Workers will pay the price,” he said.

Electronics firms, which employ tens of thousands, have been partly shielded. The US has not yet imposed the highest tariffs on items such as smartphones and certain consumer electronics. But that protection may be temporary.

Cities that rely on export industries, such as Shenzhen and Dongguan, are now offering support packages to try to steady the situation. Shenzhen recently announced measures including subsidies for firms joining overseas trade fairs and expanded export insurance to help cover cancelled US deals.

At Ningbo Taiyun Electric, a manager said production had been suspended on 12 April but has since resumed at a slower pace. The factory makes hair straighteners and curling irons, and while orders from the US have fallen, some business remains in Europe. “We’re trying to find more customers there,” the manager said. “We hope the US changes its policy soon.” The firm did not reply to further requests for comment.

Although China posted a record trade surplus close to $1 trillion last year, Beijing has hit back with tariffs of its own. Some US imports now face an additional 125 per cent charge.

President Trump has said he is open to talks with Chinese leader Xi Jinping, but Beijing has shown little urgency. For now, businesses on both sides are left waiting, as trade tensions continue to weigh on one of the world’s biggest economic partnerships.