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There is a saying in the world now: When Trump thinks, God will laugh... I think it should be, when Trump makes a move, China will laugh.
The United States recently canceled the $800 tax exemption policy. Is this a good plan or in the end it hits itself in the foot?
Not long after this policy was implemented, the number of small parcels sent to the United States around the world is expected to plummet by 81%. 88 postal operators including France and Italy simply suspended their business with the United States. After all, the US customs cannot even provide clear customs clearance guidelines. Who is willing to take risks? It is even more difficult for jewelry exporters in Yiwu, China. Once the taxes and fees and customs clearance costs increase, the already meager profits are almost gone, and some factories can only give up the US market.
National American merchants also suffered. Once the supply chain was cut off, most of the shelves were empty, and many small stores were worried about whether to close. People's lives are even harder. Yale University estimates that each family will pay an average of $2,400 per year. The port is also deserted, with container imports falling by 7.9% year-on-year. Wall Street analysts have raised the probability of an economic recession to 60%. This is not to protect local industries, but to dig a hole for themselves.
The ancients said, "Where will the hair be attached when the skin does not exist?" This is a reason why all things are reborn and depend on each other.
The United States abolished the tax exemption policy this time, which seems to want to build a "protective wall" for local manufacturing, but in fact it may be a confusing account of "killing one thousand enemies and destroying eight hundred of them".
This reminds people of the old news that the EU raised taxes on China's photovoltaic products in the past few years. At that time, the EU thought it could protect its own industry, but local photovoltaic companies did not rise up. Consumers spent a lot of extra money to buy solar panels, and in the end they could only relax.
Now the United States has taken a similar path, and the global supply chain has been disrupted. Postal companies in countries such as France and Italy simply suspended their business with the United States because the US customs cannot even provide a clear customs clearance process. After all, no one wants to lose money and make a name for themselves.
This approach of only caring for immediate interests not only disrupts the rhythm of cross-border trade, but also reduces the "business reputation" that the United States has always advocated. Who dares to easily believe in its policy stability in the future?
In fact, Trump's target is very obvious, and he is focusing on Chinese cross-border e-commerce platforms such as Shein and Temu. After all, under the $800 tax-free policy, these platforms are running fast in the US market with cost-effectiveness. 23% of American online shoppers choose Temu, and 18.3% are staring at Shein. This momentum really makes local merchants unable to sit still.
The new policy wants to "stumbling" them by raising taxes, and even hopes that the industrial chain can be moved away from China.
But market rules do not recognize administrative orders. Those bosses in Yiwu who make jewelry are holding real skills: from design proofing to factory shipment, they can turn over in one week, and the cost is lower than that of peers. How can this supply chain advantage be easily overcome by tariffs? We have to use administrative means to break the balance, but as a result, we have dragged our own consumers and merchants into a pot of porridge.
The short-sightedness of this move is particularly obvious in the era of globalization.
Economics of various countries have long been a community where you and me. Building walls with tariffs seems to protect local industries, but in fact it triggers a chain reaction of supply chain breaks and intensified inflation, forcing itself to the brink of recession.
Fortunately, China's cross-border e-commerce is not so easy to be defeated. Relying on the supply chain hard work and flexible innovation that has been developed over the years, adjusting logistics routes and optimizing product selection structures, he found new space under pressure. The Book of Changes says that if you are poor, you will change; if you change, you will be open, and if you are open, you will be long. This resilience of Chinese enterprises is the confidence that comes from the storm.
Yiwu boss can also connect with Southeast Asian buyers, find Latin American users, and sell them to the Middle East. There are fewer American markets and orders from other places have been filled. Anyway, the earth is round, and business can always be carried out.
The United States is different. It has been used to China's own creation for so many years.
Ordinary American people, especially low-income families, originally saved some money to live on small packages without taxes, but now they have to pay more. The accounts calculated by Yale University are there, spending $2,400 more a year, which is not a decimal for the already tight days.
This kind of protectionism that only cares about the present is to fail to understand the basic foundation of globalization. The right way is to cooperate with me and I and I.
US Customs may not have calculated this: Yiwu small commodity boss gave up the US market and lost orders; but the grocery store owner in a small American town has been empty for half a month, and the loss is the source of customers.
The owner of a small shop in Texas that mainly sells holiday jewelry recently complained on social media that the gross profit of Christmas pallets purchased from Yiwu in previous years was 35%. Now, with tariffs and customs clearance fees, the profit is as thin as a piece of paper. Either the price increase scares away customers or waits for the closing. This is not an isolated case. Data from the National Retail Federation shows that 62% of small and medium-sized retailers list "supply chain breakage" as the biggest operating risk this year.
After all, there is never a winner in a trade war, only the difference that no one can stand first.
Trump imposed tariffs on China in his first term, but as a result, his country's retailers association led companies to the White House to protest; now he has taken small packages and has pushed postal companies, consumers and local merchants to the opposite side.
This policy of pressing the waterfall to rise and fall exposes the fatal flaws of using administrative means to interfere with the market: you can change the trade rules, but you can't change the market rules; you can stop the parcel clearance, but you can't stop the flow of capital and orders to more efficient places.
Chinese companies have been struggling in the wave of globalization for many years and have long developed the survival wisdom of countering moves. When tariffs rise, optimize the supply chain; when channels are blocked, open up new markets; when technology is boring, do research and development by yourself.
This kind of resilience is not innate, it is "forced" by repeated trade frictions.
If the United States really picks itself out of the global supply chain, don't rush to celebrate the return of any industry. Let's first see when the shelves of its own supermarkets will be filled and when the people's wallets will no longer shrink.
After all, those who live by closing the door never last long.
