Sitting behind her cramped stall inside China’s sprawling Yiwu wholesale market, Huang Youping pours another cup of oolong tea, and waits for customers.
Surrounded by shelves of colorful Christmas crèches, carousels, and snow globes, Ms. Huang says that under normal circumstances, half of the exports from the factory she represents are bound for the United States.
But the raging U.S.-China trade war means American customers have canceled Christmas orders, leaving decorations stacking up in the warehouse, and factory workers idle.
Why We Wrote This
As tariffs bite, trade between the United States and China is grinding to a halt. Where does that leave all the people who made the supply chain hum?
“We definitely don’t want these tariffs,” she says with exasperation.
Ms. Huang is on the front lines as the massive flow of exports from China to the U.S. – valued at $438 billion last year – grinds to a halt. New U.S. tariffs of 145% make many Chinese products, like those sold at Yiwu, prohibitively expensive for U.S. importers. China has imposed retaliatory tariffs of 125% on imports from the U.S., which totaled $143 billion last year.
The trade disruption is ripping through the expansive, well-oiled U.S.-China supply chain, inflicting economic costs on everyone who has until recently made it hum – Chinese factory workers, wholesalers like Ms. Huang, shipping agents, and – across the Pacific Ocean – American dockworkers, truck drivers, importers, and, ultimately, consumers.
Ann Scott Tyson/The Christian Science Monitor
How long can it last?
At Yiwu, China’s biggest market for small goods, housing around 75,000 vendors, some like Ms. Huang are taking a “wait-and-see” attitude, hoping for a quick U.S.-China trade deal. But with their livelihoods in limbo, many people can’t afford to wait for a tariff reprieve. The longer the trade decoupling lasts, the more permanent it risks becoming, as Chinese and Americans turn to other markets to buy and sell – whether at home or abroad.
China will have to “reorient its trade toward other partners and find alternative growth strategies, because this is genuinely devastating,” says Brad Setser, a senior fellow at the Council on Foreign Relations and former U.S. Treasury official who specializes in global trade.
As for the U.S., in the short run some buyers will be forced to pay the high tariffs, he says, “but in the long run you would expect alternative sources of supply to develop.”
That might not happen fast enough to ensure shelves are stocked for Christmas. China makes and sells nearly 90% of the Christmas decorations in American homes, many of them coming from Yiwu vendors like Ms. Huang. Come the holiday, American shoppers could find themselves short of everything from Santa hats to painted Nutcrackers to glowing, gyrating reindeer displays.
“Such high tariffs will definitely have an impact,” Ms. Huang says, taking another sip of tea.
Container ports sluggish
Some 800 miles south of Yiwu, in the international trade and manufacturing hub of Shenzhen, shipping manager Ivy Liu is also worried about the sudden halt of commerce.
“Many customers have cut their orders in half, because the high tariffs mean they cannot afford to pay for the full order,” says Ms. Liu, co-founder and logistics manager at Shenzhen Tonlexing International Logistics Co., Ltd. “Factories have stopped production and workers are all on vacation,” she says.
From her office, Ms. Liu keeps a close eye on the nearby port of Shenzhen, the world’s fourth-busiest container port, where she has noticed a slowing of activity. “There aren’t as many goods to export, so prices are low,” she says. “Everyone’s just waiting.”
Logistics professionals such as Ms. Liu saw a surge in exports from China to the U.S. immediately before the Trump administration tariffs spiked in April, but since then, volume has plummeted. Some cargoes have even been abandoned in transit because the cost of the tariffs is higher than the price of the goods, according to Chinese media reports.
The slowdown has also hit the world’s top container port in the metropolis of Shanghai, which handles about 50 million containers each year. There, shipping lines canceled 26 sailings between April 14 and May 11, reducing container traffic by 40%, year on year, according to Caixin Global, a Chinese financial media company.
Ms. Liu is concerned about a loss of business from U.S. clients, and also perplexed at where they will turn for supplies. “This is actually a devastating blow to some of my friends in the United States, because they basically have no way to purchase anything,” she says. “They tell me the quality and production speed of goods from other countries is inferior to that of China,” she says. “So it’s a real headache.”
No containers, no work
Across the ocean from Shenzhen, in San Pedro, California, the trade war also looms large for Jorge Realegeno, a short-haul truck driver for a transport company based in nearby Long Beach.
Nearly a third of the trade that passes through America’s seaports is shipped through San Pedro Bay, where ports employ 186,000 people. This southernmost coast of Los Angeles County is home to the Port of Los Angeles – the nation’s largest – and the Port of Long Beach, the second-largest.
China wields outsize impact here: At the Long Beach port, 62% of in-bound goods come from China; the corresponding figure at Los Angeles is 45%.
Nationwide, ocean container freight bookings for U.S. imports from China declined 22% during the week of April 14 compared with the previous week, and were down 44% compared with the same period last year, according to Vizion, a container shipment tracking company.
The number of ships arriving in Long Beach from China is dropping precipitously – and is expected to fall 44% in the first week of May, year on year. Port of Los Angeles Executive Director Gene Seroka expects the second half of this year to show at least a 10% decline in overall cargo from 2024 levels.
“As prices begin to rise, consumers will think twice about many purchases,” said Mr. Seroka at an April 11 media briefing.
Already, business is slowing for Mr. Realegeno, who is hauling only one or two containers to and from the ports each day, down from the usual 10. Although he’s paid by the day, not by the container, a drastic slowdown could hit his wallet.
“No containers, no work,” says Mr. Realegeno, who has labored at the ports for 25 years, supporting his family in El Salvador. He is thinking about retiring in about five years and returning home, where his dollars will stretch much farther.
President Donald Trump, he says, is causing problems. “We don’t need problems.”
The trade war slowdown could mean fewer daily jobs at the International Longshore and Warehouse Union Local 13. There, workers arrive each morning in search of assignments operating cranes, securing cargo, working as mechanics, or other jobs that keep goods flowing. Tasks are assigned by seniority; longshoremen known as “casuals” get last pick, which could be nothing when the work slows down.
“This trade war is silly to me,” says Melon Caesar, a crane operator. A work slowdown won’t impact her full-time union position, she says. But as she nears retirement after 28 years on the job, Ms. Caesar says she’s concerned about the impact of the Trump administration’s tariffs on the stock market and her 401(k). “They’re playing with our money,” she worries.
She believes that despite Mr. Trump’s pledge to make America great, the opposite is true: “We’re getting enemies.”
Yet even as Washington and Beijing trade barbs, Ms. Huang, from her tiny Christmas decoration outlet in Yiwu, notes that Americans and Chinese share a common plight.
“Ordinary Chinese and American people – none of us want this [trade war],” she says. “Already, it’s not easy for us to get by,” she says. “Our two countries need to solve this problem – we regular people are helpless.”
