The U.S. and China attempt to restore their trade relations but smaller Chinese exporters continue to suffer from Trump-era tariffs. Some Chinese exporters report selling their products at reduced prices to maintain their American customer base.
Jacky Ren who operates a Chinese kitchen appliance factory explained his situation by saying “You either die immediately or die slowly.”
The recent Washington-Beijing agreement to remove some rare earth export restrictions has generated optimism yet Chinese businesses continue to face margin challenges. The companies that stayed in China face dual challenges from rising duties and decreasing market demand.
The data indicates that 32% of Chinese industrial firms operated at a loss during April while factory capacity utilization reached its lowest point in history. University of Hong Kong professor Zhiwu Chen predicts that smaller exporters will collapse into bankruptcy during the next several months unless their situation improves.
The U.S. can leverage this major challenge during trade negotiations according to Chen.
