US tariffs push Chinese factories to cut output, seek alternative markets

Chinese factories are coming under growing pressure as the impact of US tariffs intensifies, prompting many to temporarily suspend production and seek alternative markets.

Cameron Johnson, senior partner at consulting firm Tidalwave Solutions, said toy manufacturers and low-cost goods producers in China's major export hubs are facing severe strain, leading many to temporarily halve their workforce and shut down some production lines.

Some Chinese companies have begun adopting new sales strategies. Sportswear manufacturer Woodswool, for example, started selling directly to Chinese consumers via livestreaming platforms, securing more than 30 orders in a single week, CNBC reported.

Li Yan, the factory's manager, said all orders destined for the United States had been canceled. He noted that more than half of Woodswool’s production had previously been allocated to the US market, and that the company now faces a two-to-three-month disruption in production capacity while seeking new markets.

With an estimated 10 million to 20 million Chinese workers engaged in manufacturing goods bound for the United States, the recent tariff hikes have delivered a shock that could surpass the fallout from the COVID-19 pandemic. Uncertainty over trade negotiations between Washington and Beijing has further compounded the challenges, industry sources said.