Trade between the two countries is set to go down further. At the start of Trump\u2019s second term, the president imposed sky-high tariffs on Chinese exports of 145%. The two sides have agreed to take a temporary pause<\/a> while they hammer out a trade deal. The U.S. tariff rate on most Chinese goods has been temporarily reduced to 30%, plus existing duties. At the same time, China cut its retaliatory tariffs on American exports from 125% to 10%. This is on top of the 10% to 15% retaliatory duties on American products, such as coal and agricultural goods.<\/p>\n Throughout this trade war, the Chinese government\u2019s message to its own exporters has been that U.S. tariffs on Chinese products will hurt but \u201cthe sky won\u2019t fall.\u201d<\/a> Chinese officials have encouraged manufacturers to sell to other countries or to the domestic market<\/a>.<\/p>\n However, pivoting away from the U.S. market doesn\u2019t work for every Chinese product, according to Cameron Johnson, a Shanghai-based supply chains expert with Tidalwave Solutions.<\/p>\n China is a manufacturing powerhouse because it dominates every part of the supply chain, from raw materials, components such as steering wheels, to finished goods.<\/p>\n Charles Zhang\/Marketplace<\/p>\n He said while the share of Chinese exports headed to the U.S. is going down, China\u2019s trade with neighboring Southeast Asia is up.<\/p>\n \u201cA lot of it is Chinese companies and firms who moved supply chains or factories from China to Southeast Asia to supply the U.S. market,\u201d Johnson said.<\/p>\n He said China exports raw materials and components to Southeast Asia because the Chinese dominate the entire supply chain. Then Southeast Asian factories manufacture the products for the U.S.<\/p>\n \u201cAll you need to do is look at Apple and the iPhone or the MacBook, and regardless of the fact that it’s made in Vietnam or India, most of those parts come from either China or Taiwan \u2026 and they’re just merely assembled,\u201d he said.<\/p>\n That is partly why Trump also proposed high tariffs<\/a> ranging from 30% to over 40% and on countries like Vietnam, Cambodia and Indonesia<\/a> to prevent Chinese goods from just rerouting on the way to the U.S. That plan is on pause for now<\/a>.<\/p>\n For parts suppliers like eastern Zhejiang province\u2019s Daheng Electric, it is much harder to turn away from the U.S. market.<\/p>\n The firm manufactures air conditioning pull-out disconnect switches, which owner Chen Xiaosheng said are mainly used by HVAC systems in the U.S. and not so much in other regions.<\/p>\n He has spent a lot of time and money getting the right safety certification to sell to the American market.<\/p>\n \u201cMy life won\u2019t change drastically if we don\u2019t sell to the U.S. market, but it would be a waste of money for that certification,\u201d Chen said.<\/p>\n He plans to avoid the U.S. tariffs on China by assembling the switches in Malaysia. The proposed tariff rate there is lower at 24%<\/a> \u2014 but that is also paused.<\/p>\n Jia Wenzheng said his firm will start manufacturing automobile springs in Germany and Mexico to be closer to customers in Europe and North America.<\/p>\n Charles Zhang\/Marketplace<\/p>\n![\"A](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/cb25f5-20250514-a-steering-wheel-on-display-at-the-shanghai-auto-show-600.jpg\")
<\/p>\n![\"Man](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/87d583-20250514-man-in-front-of-a-display-of-automobile-springs-600.jpg\")
<\/p>\n
![\"A](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/e648ed-20250514-a-pullout-disconnect-switch-on-display-at-a-refrigeration-trade-show-in-shanghai-600.jpeg\")
<\/p>\n