Businesses use tariff pause to pivot
Return of US market largely attributed to China's hardline stance, resolute countermeasures, hard-to-replace supply chain
There are still significant uncertainties surrounding the sustainability of this tariff pause and future trade negotiations between Beijing and Washington, especially in the face of an ever-changing tariff policy of the US administration, said Wang Wen, dean of Chongyang Institute for Financial Studies at Renmin University of China.
China must remain vigilant and maintain a firm grip on its strategic countermeasures, proceeding cautiously in the negotiations and cooperation with the US, Wang said.
"In the medium to long-term, China needs to take a comprehensive, long-term view of its relationship with the US, recognizing the coexistence of strategic competition and practical cooperation," Wang said. "It is crucial for Chinese businesses to actively diversify their foreign trade footprint, reducing their reliance on the US market."
Despite the US market accounting for 50 percent of its export business, Shanghai Solid Stainless Steel Products Co Ltd is now expanding its presence in other markets, including Europe, the Middle East and economies participating in the Belt and Road Initiative, given the policy uncertainties.
"The message to Chinese businesses is clear: Use this pause to pivot, not celebrate," said Zhang Bin, the company's general manager.
Chinese sellers' ability to sell products globally is largely due to the country's robust supply chains. Under normal circumstances, Chinese goods have significant market potential, which may be temporarily compressed by policy factors such tariff hikes, but not eliminated entirely, Zhang said.
"However, the risks ultimately fall on the sellers and factories. If the product lacks core competitiveness, it will be eliminated from the market once the space is compressed," Zhang said. "Building strong, recognizable brands is crucial for Chinese companies to defend against potential future tariff pressures and maintain their market leverage."
"Hope isn't a strategy," said Zhang. "The playbook of many exporters across sectors now is resilience and innovation."
