After President Trump's implementation of 10% tariffs on all Chinese goods and the subsequent closing of a tax loophole, Chinese businesses exporting various products to the U.S. are facing severe economic repercussions. The U.S. Postal Service's temporary ban on packages from China further complicated matters. Beijing retaliated with tariffs and sanctions, escalating the trade conflict. For small businesses, such as plush toy manufacturers, the combination of halted orders and uncertainty exacerbates the already dire economic situation in China, raising concerns about the future of their operations and exports.
"It's a big headache," said Anward Shen, who runs a plush toy company based in China's eastern Jiangsu province. In 2024, he exported about $100 million worth of toys, with about half going to the United States, he said. "I can understand Mr. Trump wants to increase tariffs," he said. "But I really don't understand for plush toys, it makes no sense," adding that toys are not a strategic industry, like electric vehicles, which American policymakers want to build up domestically.
Trump is following the same playbook he used in his first term, using tariffs as a weapon to obtain concessions from Beijing, raising the possibility of some type of trade deal with Chinese leader Xi Jinping. The economic conflict, however, comes amid broader tensions between the United States and China, with Trump appointing a roster of hawkish officials in key posts.
For Chinese small businesses, the fallout from the escalating geopolitical tensions was immediate: They are struggling with halted orders, higher costs and mounting uncertainty in an already bleak economic landscape in China.
The impact of the tariffs will be significant. "This is an inflection point," said Ivy Y.
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