The signs of China’s economic difficulties from US tariffs are everywhere:
- Huge piles of containers that missed the April 9 tariff deadline sit in Chinese ports, filled with goods that tariffs have priced out of the US market. Cargo bookings for container voyages between China and the US are down by half.
- Factory floors all along the coast of China are deserted, with workers being laid off by the tens of thousands. Textile, toy, electronic and furniture factories are just a few of the industries being crushed by the tariffs.
- Streets are empty and shops shuttered in surrounding industrial towns and cities, where the now unemployed factory workers can’t afford to eat or shop.
America is by far China’s largest customer, absorbing roughly one-sixth of China’s exports. If the tariffs stay in place for any length of time, economists estimate that 80% of China’s goods will be priced out of the American market, representing a loss of almost $400 billion.
As many as 10 million Chinese workers might lose their jobs relatively quickly, says Treasury Secretary Scott Bessent, a number that could easily double in the months that follow as the ripple effects of the slowdown tear through the economy.
Beijing’s biggest worry is not a tariff recession, but the social unrest that will follow. The country’s unemployment rate was already well over 10% before Trump’s tariff increases.