When Congress raised the threshold for imported goods to enter the United States without tax at $ 800 out of $ 200 almost ten years ago, it opened the door to the US consumer market.
Chinese societies threw themselves in. First on platforms such as eBay and Amazon, and then to applications like Shein and Tehu, exporters converted products of the huge production chain of the Chinese manufacturing chain directly to Prague in the United States.
This change in policy in 2016 helped transform the economic relationship between the two countries.
While the United States has received factory goods from China for decades and Chinese manufacturing efficiency has loaded US enterprises supply chains, an extended gap without tariffs has acquired American shoppers connected to buying their exercise clothing and household aids at the price of rock bottom. And in China, millions have found work in factories that sold goods on the markets with electronic trade-their own China, such as Shein, Tehu and Tiktok, but also Amazon and Walmart.
This balloon store. Approximately four million packages a day entered the United States last year without a customs inspection and without paid duties.
This changed on Friday, when the latest measures that trade between the two largest economies of the world disintegrated. Most packages from mainland China and Hong Kong are now subject to tariffs, although they are less than $ 800.
People in both countries already feel this change. American shoppers see higher prices when they are checked on their phones, and Chinese exporters are trying to find buyers outside the United States.
Some factories in southern China, where most of this production are concentrated, have suspended operations since the beginning of April, which increases concerns that the workers will be excluded from work.
Zhang Yikui, who spreads clothing that is sold to Shein and Amazon in the Guangzhou factory, the Chinese clothing industry, said its factory produced 100,000 pieces a month. Now orders are about 60 000, said Mr. Zhang on Thursday. He and about 40 colleagues surrounded by pile of Shein’s bags, sewing denim dress.
Mr. Zhang was decisive that the buyers would find. “People in other countries still have to wear clothes,” he said. “And in the United States they don’t do such a thing at all.”
Even little known manufacturers in China were able to build successful businesses selling Americans, said Eddie Chan, consultant of electronic trading in Hong Kong, who previously helped manage Walmart operation in Chinese electronic trading.
“Over the past few months, things have changed so quickly,” he said.
Business tension is the main challenge for Chinese economic growth, which was largely driven by exports. In April, while President Trump raised tariffs to 145 percent for more than half of Chinese exports to the United States, according to official data this week, new orders to export to their lowest level sank since the end of 2022.
Ting Lu, the chief Chinese economist at the Japanese bank Nomura, said this week in a note for investors that nearly six million people in China could lose their jobs in the near future for tariffs and up to 16 million in the long run.
The Chinese government tried to shut down the country from its ten -year addiction to real estate. The collapse of the real estate market, where most Chinese households build their wealth, powered a sharp decline in prices, and had consumers to spend.
The Chinese cross -border industry of electronic trading in thousands of factories as its life block was one of the few clear places.
The rise of market platforms, such as Amazon and Shein, founded ten years ago, coincided with the pressure of the Chinese government for small businesses to do more to achieve overseas markets.
Applications functioned as a funnel for the huge variety of goods made in Chinese factories. They allowed Chinese businesses to send packages directly to shoppers, allowing them to move quickly in response to the purchase of trends and allow even small factories in China to be global businesses, said Moira Weigel, Professor Harvard, who wrote an online market.
All of this was even easier in 2016. The idea in Congress was that increasing the limit of $ 800 tax would allow consumers and small businesses more access to cheap goods from overseas and that other countries would respond by opening their markets more American goods and provoking US exports. However, the United States remained secluded among the main business partners. The Chinese threshold for imports without tax is $ 7.
Almost a century of federal law carved cheap goods known as the import of de minimis, from import taxes. The threshold, which has been $ 1 for decades, was raised to $ 5 in 1978 and in 1993.
Bump at $ 800 opened the floods and China was by far the largest exporter of de minimis goods. In 2018, Chinese companies exported about $ 5 billion in each package with an average value of $ 54. According to data from the Congress Research Service by 2023, this total amount increased to $ 66 billion.
Commercial tension and end without tax in the United States are threatened to stop it all.
Han Dongfang, founder of China Labor Bulletin, who monitors protests against the closure of the factory in China, warned that the impact of tariffs could be “worse” than the pandemic for country workers.
Some factories turned to electronic trading platforms in Europe and Southeast Asia looking for new markets for their products. Consultants of electronic trading in China offer instructions that help businesses to sell their goods on eBay in Japan or Amazon in Brazil.
Other Chinese retailers tried to supply goods in the United States. Some bought the warehouse space from Amazon and Walmart.
The Chinese government not only responded by imposing high tariffs on US imports, but encouraged consumers to buy products produced in China. However, this could be difficult if more people were unemployed, Qiu Dongxiao, head of the economy department at the Lingnan University in Hong Kong.
“Even those people who have a job right now are very careful when they spend money because they are not sure if they will still have a job tomorrow,” Qiu said.
Siyi Zhao contributed by reporting.
