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When insole factory owner Peter Wang pictures what life will be like under the tariff regime proposed by US president-elect Donald Trump, he quickly shifts to more pleasant mental imagery – the relatively low-stress environment for the Chinese exporters who have relocated to Southeast Asia.
Having already reduced his operations in the southern manufacturing hub of Dongguan amid a broader slowdown in the Chinese economy, a significant rise in import taxes from the US – where 80 per cent of his products are sold – would be the kiss of death.
“If the tariffs are imposed, my workers will lose their jobs, and I may move to Southeast Asia to look for opportunities,” he said. That region has been a popular destination for many Chinese manufacturers, as shipments can be routed through countries there to bypass US tariffs.
Wang’s worries are widely felt. A re-escalation of trade tensions, precipitated by Trump’s proposed 60 per cent tariff on all goods of Chinese make, would do much to stifle growth in the world’s second-largest economy, as it maintains a high reliance on exports.
However, analysts said, China is better prepared than it was during the initial tariff blitz during Trump’s first term, with more options to cushion the impact of whatever comes next. Some, they argued, could further reshape global trade dynamics.