‘We’re seeing a new China shock': Chinese exporters rush to Europe, Asia as Trump tariffs curb US sales

Chinese manufacturers are shifting their focus to Europe, Germany and Southeast Asia as President Donald Trump’s renewed tariffs threaten access to the United States, which has so far served as China’s single largest export destination.

This sudden shift has impacted companies that are already established in Europe as they are now facing fiercer competition from Chinese rivals that previously served the US market.

Chinese factories seek stable markets

Despite the sharp fall in US-bound shipments, trade data for May shows that exports to Europe have climbed 12 per cent from a year earlier, with shipments to Germany up by 22 per cent. Exports in Southeast Asian countries also rose 15 per cent, the Financial Times reported.

The US tariffs come at a time when China is already struggling with weak economic growth as domestic consumption remains sluggish. “China’s still going to have to export all this stuff,” said Leah Fahy of Capital Economics, “so it’s going to have to go to other countries and they’re going to face a surge in Chinese imports.”

While some companies are actively seeking buyers in Europe, others are pursuing the domestic market or exploring platforms like Temu and Alibaba to reach new international customers, the publication said.

Nail lamp producer Shaoxing Shangyu Lihua Electronic Technology has halved its US exposure since last year, according to Chen Zebin, whose family owns the company. “That road isn’t working so we need to find a new one,” he said.

Chinese goods squeeze profits 

Companies already established in Europe are now facing more competition from Chinese rivals that previously served the US market. “European buyers have too many factories to choose from, it’s driving prices down,” said Vera Wu, founder of beach umbrella maker Ewing Tourism Products. “This is the toughest year yet.” 

The European Commission is trying to track and counter any surges in Chinese imports. “We are seeing a new China shock,” said Commission president Ursula von der Leyen at the G7 gathering in Canada. “As China’s economy slows down, Beijing floods global markets with subsidised overcapacity that its own market can’t absorb.”