BEIJING: A growing number of Chinese companies are adopting a crafty way to evade US President Donald Trump’s tariffs: remove the “Made in China” label by shifting production to countries such as Vietnam, Serbia and Mexico.
The world’s two largest economies have been locked in a months-long trade fight after Trump imposed 25 percent customs duties on $50 billion worth of Chinese goods this summer, triggering a swift tit-for-tat response from Beijing.
Chinese factories making everything from bikes to tires, plastics and textiles are moving assembly lines abroad to skirt higher customs taxes on their exports to the United States and elsewhere, according to public filings.
Hl Corp, a Shenzhen-listed bike parts maker, made clear to investors last month that tariffs were in mind when it decided to move production to Vietnam.
The factory will “reduce and evade” the impact of tariffs, management wrote, noting Trump hit e-bikes in August, with new border taxes planned for bicycles and their parts.
Trump warned last week those tariffs — targeting $200 billion in Chinese imports — could come “very soon.”
“It’s inevitable that the new duties will lead companies to review their supply chains globally — overnight they will become 25 percent less competitive than they were,” said Christopher Rogers, a supply chain expert at trade data firm Panjiva.
Supply chains have already begun relocating out of China in recent years as its rising labor and environmental protection costs have made the country less attractive.
Tariffs are adding fuel to the fire, experts and companies say.
“China-US trade frictions are accelerating the trend of the global value chain changing shape,” said Cui Fan, research director at the China Society of WTO Studies, a think tank affiliated with the commerce ministry.
“The shifting abroad of labor-intensive assembly could bring unemployment problems and this needs to be closely watched,” Cui said, adding the shift would not help the US’s overall trade deficit.
The growing list of foreign firms moving supply chains away from China — toy company Hasbro, camera maker Olympus, shoe brands Deckers and Steve Madden, among many others — already has Beijing worried.
Less discussed are the Chinese factories doing the same.
Zhejiang Hailide New Material ships much of its industrial yarns, tire cord fabric, and printing materials from its plant in eastern Zhejiang province to the US and other countries.
Trump’s first wave of tariffs on $50 billion in goods this summer hit some of its exports; the next round of $200 billion looks like it will hit several more.
“Currently all of our company’s production is in China. To better evade the risks of anti-dumping cases and tariff hikes, our company has after lengthy investigation decided to set up a factory in Vietnam,” executives told investors last month.
“We hope to speed up its construction, and hope in the future it can handle production for the American market,” a company vice president said of the $155 million investment that will ramp up production by 50 percent.
Other moves abroad spurred on by tariff risks include a garment maker going to Myanmar, a mattress company opening a plant in Thailand and an electronic motor producer acquiring a Mexico-based factory, according to public filings from the firms.
Linglong Tyre is relying mostly on low cost credit to build a $994 million plant in Serbia.
The entire tire industry faces a “grim trade friction situation,” Linglong told investors last month, citing “one after another” anti-dumping cases against China.
“Building a factory abroad allows ‘indirect growth,’ by evading international trade barriers.”
China’s bike industry faces a similar pivotal moment. The center of manufacturing will shift away from China in the future, bike part maker H1 Corp. told investors when announcing its Vietnam factory.
Some of Hl’s customers started moving production — especially of e-bikes — to Vietnam, said Alex Lee, in charge of global sales at Hl Corp.
“First of all there is no anti-dumping tax on Vietnam,” Lee said, adding labor costs were lower there as well.
China’s growing e-bike industry faces duties not only from the US but also the European Union, which slapped provisional anti-dumping tariffs of 22 to 84 percent on Chinese-made e-bikes in July, alleging Chinese companies benefited from cut-rate aluminum and other state subsidies.
The state support Chinese companies receive is key to the Trump administration’s case in taxing Chinese goods, but Hl shows how companies may continue to benefit even after shifting some of their production overseas.
Government subsidies, including millions of yuan to “enhance company competitiveness,” eclipsed H1’s profit during the first six months of the year, its filings show.
Still the company went ahead and bought an operating factory in Vietnam.
Lee noted they had transferred mass production of aluminum forks and steering parts to the new plant from their factory in Tianjin.
He did not know if it would lead to job cuts in China.
Chinese companies flee overseas to avoid US tariffs
Chinese companies flee overseas to avoid US tariffs
- The world’s two largest economies have been locked in a months-long trade fight
- Supply chains have already begun relocating out of China in recent years
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
