'Living perfectly well without American goods': Why more Chinese shoppers support local brands

CNA

02-05-2025

SINGAPORE: Yu, a 32-year-old internet and trade worker from Hangzhou, used to drive around in a German-made Porsche 718.
She has since traded that for a grey six-seater by leading Chinese EV maker Li Auto, which she said boasts better 'smart driving' and navigation features, delivering a superior overall experience.
The price and prestige might not be the same, said Yu, who wished to be identified only by her first name - but her shift to domestic Chinese-made products has not stopped at car choices.
'My husband and I were joking the other day and counting how many American brands we had at home - turns out it was only MacBooks and iPhones and even those were made in China.'
Another Chinese consumer, working in the information and communications technology (ICT) sector, told CNA that many in China were 'living perfectly well without American goods'.
'Phones, computers, routers, watches are all from Huawei, my TV is from TCL Technology and my air-conditioner is from Gree,' said the worker, who asked not to be named, referring to two major Chinese electronics manufacturers from Guangdong province.
'Good quality, good service and fair prices - if US-made goods met those criteria, I'd choose them too.'
'The last time I saw a truly American product was a few days ago at Costco in China,' he said. '(It was) US beef but I didn't buy any because it tastes gamey and has that mad-cow precedent.'
FROM EXPORTING GLOBALLY TO BUYING LOCALLY
A dramatic shift is underway as a result of US President Donald Trump's multi-front trade war, with Chinese brands, exporters and companies pivoting to the massive domestic consumer market to sell and promote their products originally bound for overseas.
Chinese consumers have also been increasingly embracing local goods and brands over foreign products, experts told CNA.
'This domestic substitution is a long-term strategy, not just targeting American brands or products,' said Dan Wang, China director at the Eurasia Group, a political risk consultancy.
'The idea (for Chinese consumers) is to substitute as much as possible to be self-sufficient and US brands certainly hurt the most because of the bilateral tensions. '
Since his return to the White House in January, Trump's ratcheting up of tariffs against China, to as high as 145 per cent, has plunged the two largest economies into a new phase of global uncertainty.
Official trade talks have yet to take place but Beijing has unveiled plans to help tariff-hit firms and said it was 'evaluating' an offer from Washington to hold talks, according to China's Commerce Ministry on Friday (May 2).
The door was open for discussions, the ministry said in a statement, adding that Washington needed to show 'sincerity' in negotiations and should be prepared to take action in 'correcting erroneous practices' and cancel unilateral tariffs.
'Attempting to use talks as a pretext to engage in coercion and extortion would not work,' it said.
Beijing has also granted tariff exemptions on select products, reportedly creating a 'white list' of items which included pharmaceuticals, microchips, aircraft engines, US ethane, and was asking firms to identify critical goods they need levy-free, according to a Reuters report on Apr 25.
Government officials in the manufacturing hub of Xiamen, also recently surveyed firms to assess the impact of tariffs on local businesses, the Reuters report said, quoting a source with 'direct knowledge of the matter'.
Analysts told CNA that such targeted outreach reflected Beijing's awareness of the underlying industrial strain.
Eurasia Group's Wang said the pressure was building on Chinese producers rather than shoppers, with small- and medium-sized manufacturers (SMEs) particularly exposed.
'SME bankruptcy is real because of this tariff war,' Wang said, also warning of a broader employment impact as certain sectors remain deeply tied to US exports and technologies.
Lynn Song, chief economist for Greater China at the Dutch banking and financial group ING, said ongoing efforts by Beijing reflected a wider focus on price consciousness among Chinese consumers.
'The tariff scenario is definitely going to move (Chinese) demand further away from those products,' Song said.
In China, imported foreign goods are also relatively 'easier to substitute' with locally made options, Song said. 'The impact on Chinese consumers would be relatively minor.'
Zhu, a 25-year-old living in Shanghai, said he noticed a growing trend of 'resisting' American brands and products. 'I can't actually find anything around me that's made in the US,' he said.
An avid guitarist, Zhu has also noticed prices of American guitars 'skyrocketing' under recent tariffs. 'People have just stopped buying them,' he said, adding that it wasn't due to fear but defiance.
'I feel our national fighting spirit has been ignited. I see people online saying, 'Let's fight back!''
American brands, though, were already losing ground in China before this latest wave of tariffs, noted observers.
'Chinese consumers already have a preference for European brands or Japanese brands, if it comes to a foreign brand,' Wang said. 'Even for cosmetics, there has been some substantial substitution with domestic production.'
'American brands, they're not doing that great when it comes to consumer goods (in China).'
PROTECTING AMERICAN CONSUMERS
But what about the impact of the tariff war on American consumers?
While Beijing has been quietly insulating strategic imports, US officials have also been taking bigger steps to shield American consumers from the full brunt of the trade war, most notably in the tech industry.
According to official data, top US imports from China have largely been electrical machinery and equipment parts, valued at around US$123.8 billion and making up 28.2 per cent of total imports.
To avoid blowback and protect US tech giants like Apple whose products are made and produced in China, Chinese-imported devices like smartphones, laptops and other electronics, as well as semiconductor chips, solar cells and flat panel TV displays, have been excluded from Trump's reciprocal tariffs.
'This is kind of a sign that Trump will listen if there's a strong enough voice lobbying against (tariffs),' Song said.
Commonly used devices like iPhones were spared for political reasons, Wang said.
'For something like iPhones to suddenly get (even more) expensive because they're already expensive (to begin with), or even disappear from many of the markets in the US, it's probably too much of a political pushback, even for Trump.'
But bigger costs would still likely show up on US store shelves in the coming months, Wang added. 'American consumers will have fewer selections so it's direct damage, basically.'
BLACK FRIDAY, CHRISTMAS AT RISK?
The bigger pinch is now around the corner, analysts said. 'It should actually get worse in the coming months,' Song said.
'Once (current stocks and) inventory is depleted, companies will be forced to choose between empty shelves or paying the tariffs.'
'The inflation pressure is real,' Wang said, adding that the impact would be especially felt during key retail periods like annual Black Friday sales, back-to-school seasons and Christmas.
US e-commerce giant Amazon has already cancelled orders for multiple products sourced from China and other Asian countries and have been sourcing new suppliers.
The National Retail Federation (NRF), which includes members like superchain retailers Target and Walmart, has forecast a sharp decline in US imports for the second half of 2025, a stark signal of caution heading into crucial sales periods ahead.
For American consumers, finding alternatives to Chinese-made goods would be significantly more difficult, analysts said, noting that China's dominance in low-cost manufacturing - from electronics and toys to household goods - created dependencies that were not easily replaced.
'A lot of these products don't really have a cheaper alternative,' said Song, who noted that US firms had once attempted to diversify their sourcing during the first US-China trade war but found it harder than expected.
'It's not like … you can immediately ramp up production in Vietnam or Mexico,' Song said.
'The cost will be pushed on to the US consumer.'
'It's highly unlikely that the US can build a strong supply chain, just like China does,' said Wang, adding that while some companies were investing in domestic facilities, they still would not match China's scale, speed or cost efficiency.
According to data from Vizion, a real-time AI container tracking platform, US import bookings on massive container ships dropped by 64 per cent in March and April as Trump's sweeping 'reciprocal' tariffs kicked off.
German shipping giant Hapag-Lloyd reported a 30 per cent cancellation rate from customers on shipments from China to the US, according to a company spokesperson who cited a 'massive increase' in demand for consignments from Thailand, Cambodia and Vietnam.
IMPACT IN THE YEAR AHEAD
Despite the escalating tit-for-tat, analysts said neither Beijing nor Washington appeared ready for full consumer-level decoupling.
If China really wanted to accelerate the break, it could spark consumer nationalism, Wang said, as it had done in past disputes with Japan and South Korea. 'But the Chinese government so far has refrained from doing that.'
According to trade data, the United States bought US$439 billion worth of goods from China in 2024 - more than three times the US$143.5 billion it sold in return.
While she acknowledged that inflation may be more visible in the US, she argued that the broader risk lies with China.
'For the US, most of the problem is in the potential recession, but it's not caused by tariffs,' she said.
'Inflation might be caused by tariffs, but it doesn't seem that the American people are as worried about inflation as they worry about recession. So I think the risk to China is bigger.'
Others added that global uncertainty would continue in the months ahead.
It's a 'waiting game', Song said. 'We're in a test of endurance right now - which side will feel the pain first and which side has to lower its head and come to the table.'
Experts previously told CNA that many Chinese factories were already seeing supply outpace demand and also noted that not all goods intended for US markets would appeal to Chinese buyers.
China would not be immune to pressure, Wang said.
'Although China can produce everything, the indirect impact from overflooding its massive consumer market would be pretty big.'
Sky-high tariffs are unsustainable, experts said, but even if rates are eventually scaled back, relations between the world's two biggest economies have already changed.
'Maybe we will see a kind of gradual pivot away from the previous, highly interconnected nature of the USA and China, given the broader geopolitical risk involved,' Song said.
But for consumers on the ground like Yu, the shift from global to domestic has already taken hold.
'Times have long changed,' she said. 'It hasn't disrupted our lives. If anything, it bolsters our support (for Chinese brands).'