The Financial Times, referring to the fact that “many manufacturers are forced to pay duties on both imports and exports”, focuses on foreign manufacturers in China, which are forced to pay duties of 125% on imports of components and then 145% on exports to the U.S., thus twice falling under the impact of trade duties from the U.S., which, as noted undermines their activities.

 

It should be noted that it is not only Chinese companies that have been hit, but also American companies doing big business in China. This is due to the fact that there are a number of foreign companies operating in China that are not American but rely on American raw materials, which puts them in the position of having to pay both American and Chinese duties on the same goods. At the same time, “some large American manufacturers, including smartphone makers and some electronics manufacturers, have secured temporary relief from Trump”.

 

According to China’s General Administration of Customs, “wholly or partly foreign companies in the country last year accounted for $980bn of Chinese exports, or more than a quarter, and $820bn of imports, or more than a third”, and that “China recorded a record trade surplus of nearly $1 trillion in 2024”. An important factor is that China’s export mechanism has been driven in whole or in part by foreign companies that have sought to take advantage of China’s huge and inexpensive labour market to produce goods.

 

* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.