BEIJING/SHENZHEN, March 11 (Reuters) – Chen Zhuo is in a rush to get visas for his equipment technicians to fly from China to the United States, where one client is accelerating the expansion of a food processing plant to be able to import machinery at lower U.S. tariffs.
By contrast, Ren Yanlin, an executive at a firm supporting overseas factory projects, is brushing off the tariff cut, which came with last month’s U.S. Supreme Court ruling that curbed President Donald Trump’s ability to impose such levies at will.
If he ramped up machinery shipments to meet a rise in U.S. orders in response to the ruling, he would run the risk of levies being reimposed by the time the products arrive, Ren said.
“The broader U.S.–China relations have created a lot of psychological pressure” on companies, said Ren. “That made us feel pessimistic.”
“The more practical reality is that the North American market won’t be a priority for us.”
LOWER TARIFFS PROMPT SOME FRONTLOADING
The divergent reactions underscore how deeply the U.S.–China trade clashes have unsettled businesses and how fragile the longer-term relationship remains, even with the two presidents set to meet later this month to calm the waters.
Still, unless the escalating U.S.-Israeli conflict with Iran causes a lasting shock to global trade, the new U.S. tariff regime, which is set to remain in place at least until July, could provide a window of opportunity for some Chinese factories.
This could build on the strong export momentum in January and February and help power the Chinese economy towards growth of 4.5%-5% this year, while locking in the new markets it seized last year, accelerating its shift away from the U.S.
“The broader U.S.-China trade backdrop remains fragile, but for now, the tariff landscape is clearly more favourable for China,” said Deepali Bhargava, ING’s Asia-Pacific head of research.
“It introduces upside potential for China’s export momentum in the near term,” Bhargava said. “Chinese exporters may try to ship more goods quickly to lock in the lower tariff exposure while they can.”
The Supreme Court ruling, and Trump’s subsequent introduction of a 150-day global 10% levy, reduce the weighted U.S. tariff rate for China to 22.3% from 32.4% for Chinese goods, according to calculations by Capital Economics.
Trump plans to raise the global tariff by another 5 points, but even so, it leaves Chinese producers much better placed than last year – when at one stage the two countries had slapped embargo-like restrictions on each other.
For producers like Chen, this represents an opportunity to ship as much product in as possible, before tensions return. Trump could still reimpose tariffs using alternative legal avenues – whether targeting specific sectors or, with congressional approval, certain regions – though these routes typically take longer to roll out.
“It looks like things might be better for us than before, but we haven’t figured out the exact numbers yet,” said Chen, adding that neither his firm, nor the U.S. factory, has been affected by the Iran war so far.
He noted that the ruling levels the playing field with rival producers from other countries – in his case, from Turkey.
With Trump’s 10% global levy taken into account, as well as the industry sectors subject to their own tariffs, the Supreme Court’s ruling brought Washington’s effective global average tariff rate down by 3.8 percentage points, versus a 10-point reduction for China, Natixis estimates. If the global rate rises to 15%, the average would drop by 2.2 points versus 7.1 points for China.
“China is the biggest winner from the U.S. court ruling,” the analysts said in a note.
DIVERSIFICATION TO CONTINUE
Last year, China ran a record $1.2 trillion trade surplus as producers, boxed in by U.S. trade tensions and weak demand at home, pushed their goods into every other market across the globe.
Chinese shipments to the U.S. fell 20% in 2025, though it remains a top export destination. Shipments rose 25.8% to Africa, 7.4% to Latin America, 13.4% to Southeast Asia and 8.4% to the European Union last year.
This trend is not expected to slow down in the wake of the Supreme Court’s ruling, said Winnie Wang, president of the Shenzhen Cross-Border E-Commerce Association, whose members “are accelerating expansion in emerging markets.”
Even Chen, who wants to take advantage of lower tariffs, is still pursuing markets along China’s Belt and Road global investment footprint, citing longer-term uncertainty.
Another trend that might not change is the price pressure on Chinese products.
When producers enter new markets, they are often competing not only with local firms but with one another – a stark sign of just how severe China’s industrial overcapacity has become.
“Most of our competitors are Chinese companies, so in reality the pressure hasn’t decreased on anyone,” said a senior executive at a consumer goods manufacturer in east China, referring to competition for the U.S. market.
(Additional reporting by Nicoco Chan in Shanghai and Joe Cash and Sophie Yu in Beijing; and Lisa Baertlein in Los Angeles; Writing by Marius ZahariaEditing by Shri Navaratnam)
