Trump's "Impending Storm" Hasn't Arrived, but Mainland Foreign Trade Is Already Feeling the Winds

Sunset — The image shows a construction site in mainland China. (Video screenshot)

[People News] With Trump’s victory in the U.S. presidential election, both the CCP and foreign enterprises in China are sensing the “smell of smoke” from impending tariff hikes. Some factories in China seemed to have anticipated this, rushing shipments for months, particularly in October, when a surge in exports exceeded expectations.

Data released by the CCP’s General Administration of Customs on November 7 showed that export volumes increased for the seventh consecutive month. In October, exports grew by 12.7% year-on-year to $309 billion, surpassing foreign media’s forecast of 5.2% growth and September’s 2.4% growth. This marked the fastest pace in over two years. However, imports were below expectations, declining by 2.3% in October, more than the forecasted 1.5% decrease, and marking the first negative growth in four months. Analysts attribute this to the looming threat of a dual trade war with the U.S. and Europe.

During the election campaign, Trump stated that if elected, he would raise tariffs on relevant Chinese products to 60%. After winning, he pledged to fulfill all his promises once in office.

In China's sluggish real economy, the momentum in exports has been one of the few bright spots. Data from the Chinese customs show that last year, the most exported products to the U.S. included smartphones, tablets, and video game consoles, though signs of weakening demand have begun to show. An official factory activity survey in October indicated that Chinese factories were still striving to find overseas buyers.

Now, with Trump “drawing his sword,” the CCP is feeling the potential impact on its approximately $500 billion annual exports to the U.S. Experts predict that this impact may become evident by the second half of next year, with a surge in goods being shipped in the fourth quarter.

Some foreign enterprises and exporters are accelerating relocation plans or setting up factories outside China to prepare for Trump’s return. Australian home appliance company Breville, known for products like coffee machines, is moving more of its production out of China as quickly as possible to avoid potential new tariffs. Most of the company’s products are manufactured around Shenzhen.

Jim Clayton, CEO of Breville Group, addressed a thorny issue at the annual shareholders meeting on Thursday. “With Trump winning the U.S. presidential election, the immediate risk of substantial tariff hikes on consumer goods from China is now inevitable,” he said.

Clayton indicated that Breville would transfer more production out of China as soon as possible. He added, “We will continue to increase inventory in the U.S., possibly until the tariff measures are implemented.”

According to The Wall Street Journal, Breville’s stock fell by 3.2% during early trading in Asia on Thursday, the first trading day after Trump’s election victory.

Another significant pressure on China’s economy and businesses is the UK's new sanctions against 10 Chinese and Hong Kong companies involved in aiding Russia. This is the largest number of sanctions since Russia's full-scale invasion of Ukraine in February 2022.

The sanctioned companies include Unitree Robotics, China National Offshore Oil Corporation (CNOOC), Redlepus TSK Vector Industrial (Shenzhen), Hyning Machinery (Hong Kong), ACE ERA, Xinquan Electronics (Hong Kong), Jinhua Hairun Power Technology, Chengdu Jingxin Technology, McWell Industrial Trade, and Dongguan Shengyin CNC Equipment. Reports, citing European intelligence sources and verified documents, indicated that Redlepus TSK Vector Industrial collaborated with Russia to develop and produce long-range strike drones used in the Ukraine battlefield. This is the first known case of China exporting a complete set of military drones to Russia.

Whether it’s the squeeze-induced surge in exports from Chinese enterprises soon facing a “shrinkage winter,” or the exodus of foreign companies and sanctioned businesses, the impacts on China’s already sluggish economy will undoubtedly “add fuel to the fire.” The economic impact could influence politics, potentially leading to the CCP’s regime being further pressured by trade conflicts with the U.S. and Europe and eventually facing dissolution amidst mounting contradictions and stress.