Chinese firms race to open US factories to avoid sky-high tariffs

Ryan Zhou, the owner of a business making novelty gifts in eastern China, has been working flat out since April to open a new factory in an unfamiliar location: Dallas, Texas.

The 38-year-old has been pulling 14-hour shifts for weeks as he rushes to find warehouses, arrange shipping and obtain US work visas for his employees, with the new facility set to open in May.

Shifting production to the American South has been a complex process, but Zhou feels he has no choice: unless he can find a way to circumvent a crippling wave of US tariff hikes, his business may struggle to survive.

“The United States accounts for nearly 95 per cent of our orders,” he said. “It’s not a market we can afford to lose.”

Zhou is far from alone. Chinese manufacturers across a wide range of sectors – from petrochemicals to printed mugs – have been quietly but rapidly moving to set up new American facilities in recent weeks, as they try to dodge the worst effects of an intensifying US-China trade war.

US President Donald Trump has raised duties on Chinese goods by an eye-watering 145 per cent since returning to office in January, leading Beijing to hit back with retaliatory levies of 125 per cent. In many industries, the sky-high tariffs threaten to make direct US-China trade commercially unfeasible.

South China Morning Post