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 wars

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 US imposed a 10% tariff, and China retaliated with a 10%-15% tariff;

Second round (early April): The US raised tariffs on Chinese goods to 34%, focusing on electric vehicles, semiconductors, new energy and other sectors. China then imposed a 34% tariff on all US goods, with a 45-day grace period.

The third round (mid-April): The United States further raised tariffs on Chinese goods imported 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 raising tariffs on China to 125%, and to suspend high reciprocal tariffs on other countries for 90 days.

This series of actions not only increased 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 the Impact

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

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

• Impact Analysis :

  • Mechanical and electrical products account for 23.98% of China's exports to the US, resulting in a trade surplus of $180.286 billion, which is the primary source of the trade deficit. Following the US's imposition of high tariffs on Chinese goods, related companies are facing the dual pressures of soaring costs and lost orders.

  • Taking the semiconductor industry as an example, the United States imposed a 50% tariff on chips below 14 nanometers, which directly led to 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 : The export growth rate of mechanical and electrical products is expected to decline by 10%-15%, and some companies that rely on the US market may face a 20%-30% drop in capacity utilization.

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

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

• Impact Analysis :

  • China's dependence on the US for labor-intensive exports, such as furniture, textiles, and clothing, exceeds 10%. The US imports more than 25% of its clothing and furniture from China. High tariffs will directly undermine price competitiveness and shift orders to low-cost regions like Southeast Asia.

  • Impact : The export growth rate of labor-intensive industries is expected to 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. Combined with the previous tax rate, the overall tax rate is as high as 84%-104%, which directly impacts the global market layout of Chinese new energy companies.

  • Import restrictions on semiconductor equipment and key materials (such as photoresist 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 US 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.

• Chemicals 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.

III. Chinese Enterprises’ 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 at the same time).

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

• Exchange rate 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-driven

• 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 conversion of exports to domestic sales, and reduce dependence on the United States.

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

• Independent and controllable core technology :

  • 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 relief, 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 alleviate 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 a Crisis

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

• Industrial upgrading : The self-sufficiency rate of semiconductors 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.

In summary : Chinese companies need to focus on "precise countermeasures, driven by domestic demand, and technological breakthroughs" to transform external pressure into a driving force for deepening reform. As China's "twisting and stalking" strategy toward the United States demonstrates—reducing its dependence on the United States while increasing the United States's dependence on China—is the only way to seize the initiative in the long-term game.