Manufacturers in China rush back to work to fulfil US orders amid 90-day reciprocal tariff pause

Australia Broadcast Center

17-05-2025

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David Xu felt relieved when his jigsaw puzzle factory in China resumed production of an order worth half-a-million US dollars.
The order for 100,000 puzzles from an American client had been suspended at the height of the US-China tariff war.
But after the Trump administration and Beijing struck a deal last week to slash and pause reciprocal tariffs for 90 days, the machines in his factory were turned back on.
"Two night shifts are scheduled [every night]," Mr Xu said in a video posted on Douyin, the Chinese version of TikTok.
"We are aiming to get these [puzzles] shipped to the US within 90 days."
Mr Xu told the ABC he opened his factory in the manufacturing hub of Dongguan in Guangdong province in 2008, and it relied on business from overseas customers.
Seventy per cent of sales came from the US and the puzzles go to suppliers of major American corporations such as Disney and DC Comics, he said.
"That's why, from the bottom of our hearts, we'd like to cooperate with the US," he said.
"I think there is no winner or loser in this [trade] war."
Other businesses in China have also rushed back to work to make the most of the 90-day pause.
In Shanghai, a knitted clothing and bed linen manufacturer restarted its factory at 6am the day after the pause was announced.
The business owner told a local Chinese television station she hoped to get a backlog of 300,000 knitted clothing pieces shipped to the US within the 90 days.
"I was so happy to hear the news, we rushed to get in touch with the foreign partners on Monday night. A big weight is off my mind," said Yu Jianfen.
In Shenzhen, the director of a Chinese beauty and cosmetics company told state-owned media one of their departments worked overnight to contact American customers to get business running again.
"The US side asked us to expedite the shipment because they might be running out of stock," one employee said.
While the reciprocal tariff pause has been welcomed by many manufacturers, the US-China trade war has already cost some businesses too much.
A toy manufacturer based in China that has operated for 60 years is planning to close.
Michelle, the business owner, said US customers stopped placing orders when the Trump administration first announced tariffs on China.
She said the US clients, who the business relied on, also refused to make the final payments on existing orders.
Twelve large containers of toys now sit without purpose in the warehouse.
The toy business had received some orders after the pause was announced, but not enough for Michelle to want to continue the business.
Michelle, who preferred to only use her first name, said she planned to retire after shutting down her factory and laying off 200 staff.
Mr Xu, the owner of the puzzle factory, said when the tariff war started escalating, his customers had urged him to move his factory to Vietnam.
But he started planning to open a factory in Thailand instead, and was also preparing to reduce his workforce in China by half.
His plans are currently on pause, but said he will push ahead if the tariff war escalates again.
"That way, if there are any changes in three months or longer, we can avoid some risks," he said.
"It's our last resort, [but] with the political instability, many people in our industry are moving."
Alfred Wu, a China analyst from the National University of Singapore, said many businesses in China had already moved their factories to countries in South-East Asia and more were considering doing the same.
"This will be more common in the future," said Dr Wu.
"The sheer volume of Chinese manufacturing could have a huge impact on South-East Asia, hitting old production lines in those countries."
However, Dr Wu added that ramifications on manufacturers in those countries was yet to be seen.
Henry Zhou, an e-commerce entrepreneur based in Brisbane, has also felt the impacts of the US-China tariff war.
Mr Zhou buys products made in China on behalf of online platforms like Amazon, which are then sold to customers in Australia and the US.
Mr Zhou said the levies on shipping costs were even higher than they had been during the pandemic.
"Many people just stopped shipping, because no-one will buy those products if sellers add the additional cost directly to the price, it's just too expensive," he said.
After the tariff pause was announced, the Trump administration also reduced tariffs on small parcels sent from mainland China and Hong Kong.
Mr Zhou welcomed all the recent trade developments and remained optimistic about the future.
"The relationship between China and the US is just like a thick book," he said.
"There may be a few good pages and a few bad pages, but you can hardly tear the book apart.
"The volume of trade between China and the US is simply too large and involves too many people."
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