Dumped cargo, vanishing orders, tech turmoil: How China is feeling the heat of Trump's tariff tsunami

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The tariff war between the US and China seems to have eventually turned into an ego war between Donald Trump and Xi Jinping. With the American tariffs on Chinese goods now at a whopping 145 per cent, Beijing’s manufacturing heartland seems to have already started taking a hit.

Within days of the announcement, signs of stress began to surface: stalled shipments, panicked exporters, diverted containers, and rising uncertainty across industrial hubs like Guangdong, Zhejiang, and Jiangsu. The drastic escalation in the ongoing trade war is forcing Chinese manufacturers to confront a chilling new reality: their long-held dominance in the global marketplace is under severe strain.

Immediate fallout: Disruption across supply chains

US tariffs are already beginning to bite. Chinese exporters in key sectors—electronics, electric vehicles, solar panels, and heavy machinery—are facing cancelled orders and held-up cargo. Freight forwarders report a spike in calls from clients trying to reroute or even abandon shipments mid-voyage.

South China Morning Post quoted a China-listed export company saying that its US-bound container volume had plummeted from 40-50 containers a day to just three to six, as a result of the new tariffs imposed on Chinese imports by the Trump administration.

“We’ve halted all shipping plans from the Philippines, Vietnam, Indonesia and Malaysia. Every factory order is halted. Anything that hasn’t been loaded will be scrapped, and the cargo already at sea is being re-costed,” he told SCMP.

The report quoted the employee saying one client had told his company that it was abandoning goods already on the water and giving them to the shipping company, as “no one will buy them after the tariffs are imposed”.

Meanwhile, according to a Bloomberg report, Chinese exports of rare-earth minerals are all but on hold as producers are struggling with tighter permit requirements following last week’s new restrictions on the critical materials in an escalating trade war with the US.

Last Friday, Beijing escalated its trade response to US tariffs by adding seven key rare-earth minerals to its export control list. This move, targeting materials crucial for high-tech manufacturing, threatens to disrupt global supply chains, building on existing restrictions on other Chinese-dominated minor metals.

Tech sector at strategic risk

Nowhere is the anxiety more palpable than in China’s tech ecosystem. U.S. tariffs and export controls are hitting semiconductors, telecom equipment, and next-gen batteries—all areas China has invested billions into as part of its “Made in China 2025” industrial blueprint.

For companies like Huawei, BYD, and Xiaomi, the fear is twofold: that punitive duties will dry up international demand, and that global supply chains may be forced to exclude Chinese firms entirely.

According to a Bloomberg report, the Hang Seng tech Index has shed more than USD 350 billion in market value since a March high, though it has gained about 9 per cent over the past three sessions.

The report quoted Bush Chu, an investment manager at Aberdeen Investments, saying that the US actions against China such as restrictions on financial holdings or further sanctions are a “serious risk”.

Delisting of Chinese firms on cards?

Adding to the trouble, reports suggest that the Trump administration is weighing the possibility of delisting Chinese companies from US stock exchanges.

US Treasury Secretary Scott Bessent, speaking on Fox Business Network on Wednesday, said the option was under consideration. “Everything’s on the table,” Bessent said when asked about potential delistings.

As of March 7, 286 Chinese firms—worth $1.1 trillion in combined market cap—are listed on US exchanges. These include giants like Alibaba, Pinduoduo, and EV makers NIO, XPeng, and Li Auto. A delisting could further destabilise U.S.-China economic ties.

Bloomberg quoted Chu saying that such measures could cause a sharp selloff of heavily foreign-owned China tech stocks.

Tariffs to damper China’s economic growth

Economists anticipate that these trade tensions will dampen China's economic growth. A Reuters poll forecasts China's GDP growth to slow to 5.1% in the first quarter of 2025, down from 5.4% in the previous quarter. Projections for the full year suggest growth could decline to 4.5%, below the official target of around 5%, with a further decrease to 4.2% expected in 2026.

Apart from hitting China’s manufacturing sector hard, the tariff imposition is also leading to job losses and reduced industrial output. In response, the Chinese government is considering additional fiscal and monetary stimulus measures, including a potential 1.5 trillion Yuan package and expected rate cuts by the People's Bank of China, according to a Reuters report.

China's consumer prices fell for the second straight month in March while factory-gate deflation worsened, as the escalating trade war heightened worries about mounting piles of unsold exports that could drive domestic prices even lower.

Last week, global ratings agency Fitch downgraded China's sovereign credit rating, citing rapidly rising government debt and risks to public finances, suggesting a tricky balancing act for policymakers seeking to expand consumption to guard against a trade downturn. ​

For now, China’s export-driven industries are in damage control mode. With tariffs already taking a visible toll, many firms are bracing for a tough year ahead. The fallout is unlikely to remain confined to trade alone—it could spill into currency policy, investment flows, and geopolitical alliances.