China's shipping, textile, and other industries face collapse as US-China tariff war hits

It's all covered in today's China Truths. China's shipping, textile, and other industries face collapse as US-China tariff war hits. Under the impact of the US reciprocal tariffs, China's import orders plummeted, resulting in a wave of empty flights in shipping and a large number of manufacturers in Guangzhou, Shenzhen, and other places are facing a crisis. Tariffs have also led to rising prices of electronic products. Merchants in Shenzhen's electronic trading market, Huaqiangbei, are actively stocking up. Let's take a look at the report. At present, the US tariff on Communist China's goods is as high as 145%, causing a sharp decline in container transportation from China to North America. According to data from the freight company HLS Group, as of Wednesday, April 16, a total of 80 freight ships departing from China were blank or cancelled because of the high US tariffs, which led to a sharp drop in orders. Since the tariffs came into effect, the Shanghai port has almost come to a standstill from the next day, and many batches of goods have been forced to stay in the port yard. Shippers either cancel orders or find other channels. The trend of cargo flight cancellations is increasing and spreading rapidly to the entire Pacific route. A report from a market intelligence company pointed out that China's container bookings will plummet by 30% to 60% in the next three weeks, and other parts of Asia will also fall by 10% to 20%. The impact of the US tariffs on the CCP has caused some shipping companies to make structural adjustments to their routes. The outside world believes that this may promote desynergization and trigger a redeployment of global route strategies. Sun Guoxiang, professor of the Department of International Affairs and Business at Nanhua University in Taiwan. The high tariff policy is not a short-term measure, but an institutional tool to promote desynergization, affecting the long-term export prospects. Current affairs commentator Chin Peng. If high tariffs continue for a long time, the loss of orders may not be recovered, especially key sales such as Christmas and New Year, which will further aggravate the impact. The importance of Sino-US trade to the Chinese economy far exceeds the superficial data. High tariffs have also hit communist China's textile industry, medical equipment, cross-border e-commerce, and other industries. There are ready-made clothing containers from China, with a customs declaration value of US$12,398, but the tariff has to be as high as US$21,138, which is twice the value of the goods. As a result, a large number of unsaleable products for export are piled up, and enterprises are facing bankruptcy. Ms. Li, manager of a medical device manufacturer. We are not only facing tariff issues now, but also life and death issues. We see that the profit margins of the garment and textile industries are slim. The dilemma of unsaleable products and domestic sales, weak domestic demand, difficulty in taking over, and the market's retaliatory sentiment are heating up. The pressure on funds and industrial chains, that is, liquidity tightening. Coupled with the outflow of cross-border investment, the main focus is on the collapse of the capital chain of small and medium-sized exporters. Under the heavy blow of Trump's tariffs, the leader of the Communist Party of China has visited Southeast Asian countries in recent days, trying to win over and confront the United States. But the outside world believes that the Communist Party is doomed to fail, and the United States is determined to reshape the economic and trade structure this time. QINPENG First, domestic demand and the Southeast Asian market cannot consume such a huge production capacity. Second, price cuts may cause losses to companies. Third, in order to avoid secondary sanctions from the United States, Southeast Asian countries will also continue to restrict Chinese products from entering their supply chains. SUN GUOXIANG The tariff effect is not a temporary shock, but a spillover reaction of strategic adjustments. In other words, the high tariffs of the United States represent an institutional challenge to China's economic model, mainly China's low-price, large-scale export strategy. This is not just an economic sanction, but more like a structural screening. It forces industrial transformation, supply chain reconstruction, and new arrangements for geoeconomics and trade. Tariff War Hits China Hard, SMEs Face Bankruptcies The China-US tariff war that started in early April has hit China's SMEs hard. Currently, a large number of factories and cross-border e-commerce companies have closed down or resorted to layoffs and salary cuts to survive. On April 16, the White House issued the latest statement that, in view of China's retaliatory measures, Chinese goods exported to the US may face a reciprocal tariff of up to 245 percent, which once again triggered global market shocks. A private enterprise owner who goes by the pseudonym Wang Peng said that China mainly relies on investment, consumption, and exports to drive the economy. Now the people and the government have no money to invest or consume. If the export economy collapses again, the impact will be huge. Wang Peng, a private enterprise owner in Guangdong, exports mainly rely on private enterprises. The tariffs are too high, and many private enterprises cannot operate. In fact, it has just begun. Many countries have to take sides. Most countries negotiate with the United States instead of going hard. An e-commerce owner in Yiwu, who goes by the pseudonym Lin Chen, revealed that after the United States cancelled the exemption for small package tariffs, T86 Chinese cross-border e-commerce basically had no room to survive. Yiwu e-commerce boss Lin Chen, the US has also closed the green channel, T86 is gone, the US trade can't do anything. The current tariff is 245. Isn't it scary? When it increases to more than 50 points, there is no difference between 100 and 200. For example, my store has also dropped a lot, about 50 to 60 percent. Lin Chen also said that the change in e-commerce platform rules has crushed many small and medium-sized e-commerce companies. His warehouse is full of returns, so he decided to withdraw from Temu, a cross-border e-commerce platform under Pinduoduo, to stop losses in time. Lin Chen. A large number of e-commerce companies have died now. There is no platform to operate. These routines, high fines, anyway, small and medium-sized businesses will be eliminated. Many factories are taking holidays, cutting wages and laying off employees. But there are many big sellers in Yiwu now, and there are tens of thousands of orders a day. They are just selling garbage and inventory tail goods. Wang Peng also said that there are thousands of small and medium-sized business owners are also depositors of village banks in Henan and Anhui. Their deposits have been illegally frozen for more than three years, and their survival can be said to be quite difficult. Now they are facing a tariff war, and there is really no way to survive. He called on the outside world to pay more attention. Wang Peng. For our vast number of depositors in village banks in Henan and Anhui, these small and medium-sized private business owners, this is a disaster among disasters. Not only are our deposits frozen, but who will we sell our products to after we produce them? We really can't survive. After US President Trump imposed reciprocal tariffs on countries around the world, the Chinese Communist Party threatened to fight to the end and imposed retaliatory tariffs regardless of people's livelihoods, which actually harmed the interests of the Chinese people. It is suspected that more companies will be closed for holidays. On April 9, a large number of bloggers on mainland social media platforms released videos or screenshots and lamented that due to the impact of US tariffs, overnight, many Chinese companies and manufacturers have closed down, stopped business, and Chinese workers have all been given holidays. Zhejiang Medicine said, It's normal for many factories to have holidays and go bankrupt in this trade war. There have been many difficult days since the beginning of this year. A Guangdong Daily reporter said, I heard that many factories started to have long holidays on May 1st. Netizen said, The sky is falling. Everything was fine yesterday, but it happened too suddenly. When I came to work today, my boss said that we don't need to work anymore and we all have a holiday. We have just come to work after the Chinese New Year for more than three months, and now we have to go home. Another blogger said, It's too sudden. Everything was fine yesterday, but there is nothing to do today. There is nothing to unload on the assembly line. The boss said that orders from the United States have been suspended and everyone will have a holiday after today. The factory notified us that after today's work, we will have a month off. It's the same in our company. All goods shipped abroad have to be suspended. Many netizens left comments in the comment area saying that they also had holidays due to tariffs. Yesterday, our boss said that it was urgent to prepare the goods and that they would need them the next day. A few minutes later, he told us that we didn't need to prepare them. Due to the trade war, the customer's order was cancelled. Many netizens mocked, The international trade war has started and Trump has increased tariffs by 145%. How many people can withstand it? Netizens mocked, It's good for the whole country to go home and rest together. Some netizens also mocked, The whole nation supports the central bank. According to a video circulated online, a Chinese man was fed up with the CCP's tariff retaliation against the United States. He said, I really can't stand it these two days. Don't talk about adding tariffs. Let's just fight hard. Pretending to be a tough guy is seeking death. Making money is the bottom line. The man said that the United States has 350 million people, holding one-third of the global consumption pie. What does that mean? It's equivalent to one in every three people on earth spending money being an American. The EU has 450 million people, and its purchasing power is not even a fraction of that of the United States. China's 1.4 billion people are working hard to make things, and their consumption power is only one-fifth of that of the United States. The data is there. In the face of absolute market crushing, pretending to be cool is the greatest stupidity. You should lower your head to negotiate when you should and make concessions when you should. Now, keeping your job is more important than anything else. The man angrily pointed out, Instead of shouting and killing, you might as well think about how to make money within other people's rules. Wait until your pockets are full of US dollars, then talk about industrial upgrading and de-dollarization. Otherwise, it's all bullshit. The man finally said, Look at how Singapore responded. It's not shabby to bow your head to make money, but it's really stupid to gamble with the lives of ordinary people. China's economy is in chaos, and the CCP is in a hurry to save the market. Affected by the US reciprocal tariff storm, China's stock market has plummeted in the past week. At the close of the market, the three major indexes of Shanghai, Shenzhen, and Chinaxt fell by 7.34%, 9.66%, and 12.5% respectively. Among them, the Shanghai Composite Index fell below the 3,100-point mark, marking the largest single-day drop in five years. The Hang Seng Index fell by 13.22%, marking the largest single-day drop since 1997. In addition, the onshore RMB fell below 7.31, hitting a new low in more than two months. It is worth noting that CICC, known as the Financial State-Owned Assets Supervision and Administration Commission, announced efforts to save the market. But the market did not buy it, and it may be difficult to escape the mistakes of past failed rescues. Wang He, an expert on China issues, previously told the Epoch Times that China's economy is in a state of turmoil and is already terminally ill. China's economy is now stuck in a long-term deflationary vicious cycle, with corporate profits continuing to decline, resident consumption sluggish, and domestic demand seriously insufficient. The U.S. tariff on Chinese goods has exceeded 60%, and foreign trade exports have been hit hard. The real estate industry continues to be depressed, and local debts have seriously dragged down the local economy. In addition, it is also facing a series of social and economic problems such as the closure of private enterprises, the withdrawal of foreign enterprises, a sharp decline in investment, a decline in the birth rate, large-scale unemployment of employees, and government fiscal and tax losses. Please share your thoughts in the comments section below. We will keep reporting on the COVID surge in China, so don't forget to subscribe to our channel and turn on the notification bell to get the latest videos. And thank you for tuning in.