Yiwu responds to US' tariff hike with resilience, innovation

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By Chu Daye, Chen Qingrui (Global Times) 15:37, February 13, 2025

Merchants in Yiwu, East China's Zhejiang Province responded to the additional 10 percent tariffs imposed on Chinese goods by the US administration of Donald Trump with various measures to beef up the competitiveness of their products, with some businesspeople pointing out the tariff-induced costs will be ultimately passed to consumers in the US.

Chinese analysts said that despite significant challenges to global free trade and multilateral trade rules posed by the US' unilateral and protectionist tariffs, China's foreign trade sector can effectively mitigate the damage caused by the US tariffs, with the resourcefulness of its entrepreneurs, the competitiveness of its products, its supply chain advantages and multi-layered support from government at all levels.

Coping with change

As the US' imposition of 10 percent tariffs on all Chinese goods to the US under the pretext of issues such as fentanyl went into effect, the world is zooming on Yiwu, China's export manufacturing hub.

Hong Kong-based newspaper Sing Tao Daily reported that some vendors are receiving large orders in the first days since they resumed work after the Spring Festival holidays.

Telephone interviews by the Global Times indicated that merchants in Yiwu are prepared and are generally calm as they brace for the impact of tariffs, even as some express mixed reactions.

To many merchants in the city, the tariffs came as a disappointment, but hardly a surprise. Some companies raised concerns about the impact of the US' protectionist stance and its ripple effects that could affect business in other regions, but many vowed to try to maintain their existing market share by working inwardly, such as optimizing their business structures and improving efficiency in the upper stream of the supply chain, to improve their profit margins while trying to grab new markets as alternatives.

They are confident in mitigating the risk through market diversification and strong customer relationships.

"The US tariff increase could affect both our customers' profits and ours, especially on our more traditional product lines. However, we are actively addressing the challenge," Wang Nan, owner of Yiwu Conan Hardware Tools Trading Company, an exporter based in Yiwu, told the Global Times on Wednesday. Wang did not disclose an estimate of the impact of the tariffs on his business.

"We are not lowering our prices because of the tariffs, as business relies on mutual support," Wang said.

Wang said the tariffs pushed his company to double down on developing distinctively new products different from existing offerings. This should justify premium pricing and offset tariff-related losses, according to the seller of hardware tools.

Another Yiwu-based exporter, Zeng Hao from Jinqi Technology Co, is more optimistic.

"Some 80 percent of our products are exported to the US, following a branding and high-end strategy. Our competitive advantage lies in our continuous design innovation, backed by the scale and supply chain strengths of Yiwu," Zeng told the Global Times, noting that the tariffs would be a driver for the emergence of highly innovative, high-profit products.

Meanwhile, some merchants told the Global Times that certain exported products are essential, and minor price fluctuations in orders can be managed.

"Supposing demand from the US will drop slightly due to tariffs, we have other markets to fill in as many countries around the world celebrate Christmas, not just the US," Cai Qinliang, secretary general of the Yiwu Christmas Products Industry Association, told the Global Times on Wednesday.

The reaction from Yiwu merchants has underlined Chinese exporters' agility, efficiency, and resilience to fast-changing market conditions including the direct and indirect shocks brought by the US' unilateral imposing of protectionist tariffs, Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Wednesday.

"Since Trump imposed tariffs during his previous presidential term, many companies have already redeployed their business and now those that still export product from China to the US are actually catering to rigid demand there," Li said

These advantages have ensured the robust growth of Yiwu's foreign trade. In 2024, the city's foreign trade jumped by 18.2 percent year-on-year to 668.93 billion yuan ($91.51 billion). Exports grew by 17.7 percent.

Despite the achievement, the city's commerce bureau has attached great importance to maintaining the momentum of foreign trade this year and has acted to organize local companies to attend some 50 trade shows globally, with a focus on Southeast Asia and Africa, according to a statement the bureau sent to the Global Times in January.

All out support

At the recently concluded local two sessions - the annual meetings of provincial-level lawmakers and political advisors - in Zhejiang, the East China economic powerhouse where Yiwu is located, the province said it aims to largely retain its proportion in national exports, which came in at 15.3 percent in 2024, unchanged in 2025, according to a report by domestic news portal people.com.cn in January.