The Sino-US trade war escalates: in-depth analysis of the affected domestic industries and the response strategies of Chinese companies!

1. The escalation of tariff game

Since the Trump administration restarted the trade war with China in 2025, the Sino-US tariff game has entered a white-hot stage:

Round 1 (February): The United States imposed a 10% tariff, and China retaliated with a 10%-15% tariff;

Second round (early April): The United States raised the tariff rate on Chinese goods to 34%, focusing on electric vehicles, semiconductors, new energy and other fields; China immediately imposed a 34% tariff on all categories of US goods and set a 45-day buffer period;

The third round (mid-April): The United States further raised tariffs on Chinese goods exported to the United States to 84%. China retaliated simultaneously and implemented systematic measures such as export controls and entity lists.

Fourth round (mid-April) : Trump threatened to continue to increase tariffs on China to 125%, and suspend high reciprocal tariffs on other countries for 90 days.

This series of actions not only pushed up the trade costs of companies in the two countries, but also had a profound impact on the global supply chain and industry landscape.

II. Impact on core export industries and extent of impact

1. Mechanical and electrical and high-tech products: the first to be affected

• Key categories : automatic data processing equipment, mobile phones, home appliances, semiconductor equipment, etc.

• Impact Analysis :

  • China's exports of mechanical and electrical products to the United States accounted for as high as 23.98%, with a surplus of US$180.286 billion, which is the main source of the trade deficit. After the United States imposed high tariffs on China, related companies are facing the dual pressure of surging costs and loss of orders.

  • Taking the semiconductor industry as an example, the United States imposed a 50% tariff on chips below 14 nanometers, which directly resulted in an additional cost of US$120 million per month for wafer manufacturing equipment, forcing companies to accelerate the layout of the "China + 1" supply chain.

  • Impact degree : It is expected that the export growth rate of mechanical and electrical products may decline by 10%-15%, and some companies that rely on the US market may face a 20%-30% decrease in capacity utilization.

2. Labor-intensive industries: high dependence and short-term pressure

• Key categories : clothing, furniture, toys, lamps, etc.

• Impact Analysis :

  • China's export dependence on labor-intensive products such as furniture, textiles and clothing to the United States exceeds 10%, and the proportion of clothing and furniture imported by the United States from China even exceeds 25%. High tariffs will directly weaken price competitiveness and cause orders to shift to low-cost regions such as Southeast Asia.

  • Impact degree : It is expected that the export growth rate of labor-intensive industries will decline by 5%-8%, and the youth unemployment rate may increase by an additional 0.4 percentage points.

3. Strategic emerging industries: precision strikes and long-term game

• Key areas : electric vehicles, photovoltaics, semiconductors, and new energy.

• Impact Analysis :

  • The United States imposed a 50% tariff on Chinese electric vehicles, and combined with the previous tax rate, the comprehensive tax rate was as high as 84%-104%, which directly impacted the global market layout of Chinese new energy companies.

  • Import restrictions on semiconductor equipment and key materials (such as photoresists and special electronic gases) may delay the process of technological breakthroughs, but in the long run they will force domestic substitution to accelerate.

4. Other affected areas

• Agricultural products : China's dependence on U.S. soybean and meat imports is relatively low (1%-2%), but after tariffs push up costs, the domestic breeding industry will benefit from import substitution in the short term.

• Chemical and Energy : Imports of products such as liquefied propane and polyethylene have shifted to the Middle East and South America, and the domestic oil and gas industry chain has ushered in development opportunities.

3. Chinese companies’ response strategies: multi-dimensional breakthroughs and long-term resilience

1. Short-term strategy: flexibly adjust supply chain and market layout

• Supply Chain Diversification :

  • Avoid high tariffs through "entrepot trade", such as using transit countries such as Vietnam and Mexico (note that the United States has also imposed tariffs on transit countries simultaneously).

  • Accelerate the "China + 1" layout, establish production bases in Southeast Asia, Eastern Europe and other places, and diversify risks.

• Currency hedging and cost optimization :

  • Use the depreciation of the RMB to partially offset tariff costs, while reducing labor and logistics costs through intelligent transformation.

2. Medium-term strategy: market diversification and domestic demand drive

• Exploring emerging markets :

  • Relying on the "Belt and Road" and RCEP, China will increase exports to ASEAN, the Middle East and Africa (China's exports to ASEAN will grow by 12% in 2024).

  • Deepen the European market, for example, by rebuilding cooperation through the China-EU anti-subsidy negotiations on electric vehicles.

• Expanding domestic demand cycle :

  • Policies support domestic consumption (such as tax and fee reductions, and the issuance of consumer vouchers), promote the transformation of exports to domestic sales, and reduce dependence on the United States.

3. Long-term strategy: technology upgrade and rule reconstruction

• Core technology is independently controllable :

  • Increase R&D investment in semiconductors, new materials, industrial software and other fields, such as domestic substitution of "bottleneck" links such as photoresist and carbon fiber.

  • Promote the intelligent upgrading of manufacturing industry and increase product added value (such as smart home appliances and high-end clothing brands).

• Participation in international rule-making :

  • Join forces with the EU, ASEAN and other economies to promote WTO reform, include "technological blockade" in the scope of trade remedies, and fight back against US unilateralism.

4. Policy coordination and risk prevention

• Utilize policy tools : apply for export tax rebates and special relief funds to ease the pressure on the capital chain.

• Prevent financial risks : gradually reduce holdings of U.S. debt, promote the application of the RMB Cross-Border Payment System (CIPS), and reduce dependence on the U.S. dollar system.

IV. Future Outlook: Opportunities in the Crisis

Despite the significant short-term impact, the Sino-US trade war has also provided impetus for China's economic transformation:

• Industrial upgrading : The semiconductor self-sufficiency rate increased from 15% in 2018 to 35%, and the global share of new energy vehicles exceeded 60%.

• The right to speak on rules : Use the "tariff lever" to promote the formulation of new standards such as digital trade and green tariffs and reshape the global economic order.

Summary : Chinese companies need to focus on "precise countermeasures + domestic demand drive + technological breakthroughs" to transform external pressure into a driving force for deepening reform. As China's "twisting, entanglement and fighting" strategy against the United States shows - reducing dependence on the United States while increasing the United States' dependence on China, can take the initiative in the long-term game.