How China’s factory muscle is blunting Trump’s tariffs—for now

China’s manufacturing outpaces Trump tariffs

Despite record tariffs from President Trump, China’s manufacturing centres are proving unexpectedly resilient. The city of Yiwu — home to the world’s largest wholesale market — has become a symbol of how Beijing’s factory strategy is cushioning the economy. Even after losing American buyers, vendors like Gong Hao have pivoted to new markets in Europe and Southeast Asia, highlighting China’s deep manufacturing muscle, the New York Times reported.

Factories replace lost US demand with new markets

China’s trade surplus has surged to over $875 billion this year, approaching an all-time record. Exports now account for nearly one-third of China’s economic growth — a figure that underscores how central global demand has become to its stability. While exports to the US dropped by 27 percent in September, shipments elsewhere rose sharply, with Southeast Asia emerging as a key buyer.

Tariffs cause whiplash for small exporters

For factory owners like Fiona Zhou of Kaqu Toys, Trump’s on-again, off-again tariffs have created confusion. Her company delivered full-year US orders during a 90-day tariff pause and even offered a 5 percent discount to offset higher costs. Now, as tariffs resume, she’s redirecting shipments to emerging markets in Africa and Southeast Asia. “It’s like your friend arguing with you all the time — what can you do?” she said.

Domestic troubles push China to export more

Behind the export boom lies a troubled domestic economy. Retail sales have stalled, household savings are high, and a years-long property crisis has drained consumer confidence. Prices are falling, wages are slowing, and youth unemployment remains high. To offset weak domestic demand, Beijing is subsidizing factories and encouraging exporters to sell abroad — even giving them special internet access to promote products on banned platforms like TikTok and YouTube.

Cheap currency, low costs, global competitiveness

China’s weakened currency and falling prices are making its exports more competitive. Analysts say that as deflation deepens, Chinese goods are becoming cheaper globally. September exports rose to $328.6 billion — the fastest growth in six months — as Chinese factories undercut rivals across Asia and Europe. But economists warn that this dependence on exports is risky if other countries begin raising trade barriers.

A global ripple effect from China’s resilience

Yiwu’s markets remain packed with buyers from Africa and Asia, where entrepreneurs like Tanzania’s Rhoda Nghelembi are sourcing cheap Chinese goods for resale. “I see my future growing so big and rich because of China,” she said. Yet, as trade wars intensify and domestic pressures mount, China’s factory-driven resilience could prove both its greatest strength and its biggest vulnerability.