In April 2025, Chinese e-commerce platform Taobao, operated by Alibaba, catapulted from 47th to 5th place among free apps on the US Apple App Store. Similarly, DHgate, a platform connecting consumers directly with Chinese manufacturers, soared to the 2nd spot, trailing only ChatGPT. These apps, previously lesser-known in Western markets, have gained traction as consumers seek cost-effective alternatives amid rising prices.​

A significant driver of this shift is the proliferation of viral TikTok videos revealing that many luxury goods, often perceived as European-made, are actually manufactured in China. These videos have prompted consumers to bypass traditional retail channels, opting instead to purchase directly from Chinese suppliers via apps like Taobao and DHgate.​

The surge in app downloads coincides with the US government’s decision to impose a 145% tariff on Chinese imports and eliminate the “de minimis” exemption, which previously allowed duty-free imports under USD 800. These measures have led to significant price hikes on platforms like Shein and Temu, prompting consumers to explore alternative shopping avenues.

While purchasing directly from Chinese apps may not exempt consumers from tariffs, the perception of accessing products at factory prices remains appealing. However, experts caution that this approach carries risks, including potential quality issues and a lack of consumer protections.​

Interestingly, while exports from Chinese e-commerce platforms to the US have declined by 65% in the first quarter of 2025, shipments to Europe have increased by 28%, indicating a strategic pivot towards markets with fewer trade barriers.​

This phenomenon illustrates how digital platforms and social media can influence consumer behaviour, even amidst geopolitical tensions. As trade policies evolve, the adaptability of both consumers and e-commerce platforms will continue to shape the global retail landscape.

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As global trade frictions resurface, particularly with renewed threats of tariff escalation targeting Chinese exports, understanding the regional distribution of trade reliance across China becomes increasingly important. While China’s national export performance remains resilient, with Q1 2025 exports rising 6.9% year-on-year to RMB 6.13 trillion (841.22 billion), the degree of exposure to foreign trade varies significantly across provinces. Some regions, especially those built on high-volume manufacturing and cross-border trade, are far more vulnerable to external shocks than others.

Trade dependency, typically measured as the ratio of a region’s total imports and exports to its GDP, provides a useful proxy for assessing tariff sensitivity. A high dependency ratio often reflects dynamic integration into global markets, but it also signals heightened exposure to geopolitical volatility and trade barriers.

Cities such as Shenzhen, Dongguan, and Jinhua (home to Yiwu) routinely record foreign trade volumes that exceed their total economic output. Meanwhile, border cities like Chongzuo in Guangxi have become critical nodes in China’s land-based trade with Southeast Asia. These areas stand at the forefront of new trade frictions, bearing the brunt of policy uncertainty, shipping disruptions, and shifting global demand.

This article by China Briefing examines which provinces and key industrial cities are most reliant on foreign trade, explores how sectoral composition shapes tariff vulnerability, and reviews the latest local and national policy responses aimed at mitigating external pressure. As China continues to navigate an increasingly fragmented global trading system, regional disparities in trade exposure will shape both the risk profile and resilience of the country’s export-driven economy.

Trade dependency ratio as a risk indicator

In the context of escalating global trade tensions, the trade dependency ratio – defined as the total value of imports and exports relative to a region’s GDP – serves as a critical metric for assessing exposure to external economic shocks. While high trade dependency often signals strong global integration and export competitiveness, it also points to greater vulnerability to tariff-related disruptions, especially when value chains are heavily dependent on foreign demand or imported inputs.

Provincial-level trade reliance

Across China, provinces along the eastern and southern coastlines display the highest trade dependency ratios. Guangdong, for instance, recorded over RMB 2.09 trillion (US$286.81 billion) in exports in Q1 2025 alone, powered by its manufacturing giants in Shenzhen and Dongguan. Jiangsu and Zhejiang also maintain substantial exposure, with both provinces ranking among the top three in terms of absolute export volume and consistently exceeding national averages in trade-to-GDP ratios.

Notably, trade-driven inland provinces like Sichuan and Chongqing have seen rising dependency as they integrate into transnational value chains and Belt and Road logistics corridors. While their overall trade volumes remain lower than the coastal heartlands, the rapid pace of growth, particularly in electronics and automotive parts, signals emerging exposure that warrants closer monitoring.

City-level manufacturing and export hubs

Within these provinces, specific cities exhibit outsized roles in foreign trade relative to their economic scale. Shenzhen and Dongguan remain core export engines, with each city’s trade volume exceeding local GDP in some years. Yiwu, under the jurisdiction of Jinhua in Zhejiang province, is another key player, specialising in small commodities and maintaining strong links with markets across Asia, Europe, and the Middle East.

Further inland, Chongzuo in Guangxi has emerged as a vital land port for ASEAN trade, especially under the Regional Comprehensive Economic Partnership (RCEP). While often overlooked in national trade discussions, these city-level nodes are acutely exposed to changes in border policies, shipping rates, and tariff structures.

As a result, both provincial and sub-provincial data are indispensable when evaluating who stands to lose or adapt the most in the face of shifting global trade policies. With Q1 2025 showing a record RMB 10.3 trillion (US$1.41 trillion) in total trade volume and a 6.9 percent growth in exports despite softer global demand, the stakes remain high for regions that have long staked their economic strategies on cross-border commerce.

Trade war scenarios: Which regions and industries are most exposed?

As global geopolitical tensions continue to shape trade dynamics, a key consideration for businesses and policymakers is understanding which regions and sectors within China are most vulnerable to tariff escalation or regulatory headwinds. Assessing export composition and market orientation at the provincial level provides a clearer picture of risk exposure under potential trade war scenarios.

Provinces with economies heavily reliant on specific high-risk export categories – such as consumer electronics, auto parts, and textiles – tend to face heightened exposure to trade frictions. Moreover, regions with a significant proportion of exports destined for the United States or the European Union are particularly susceptible to tariff shocks or non-tariff barriers.

Guangdong: High sensitivity to the US market and the electronics sector

Guangdong, long considered China’s export powerhouse, exemplifies a high-risk profile. Its robust electronics manufacturing base and deep integration with US-facing supply chains make it acutely sensitive to tariff changes. In particular, the province’s concentration in consumer electronics and components – industries commonly targeted in trade disputes – means that even marginal increases in trade barriers could yield outsized economic impacts.

Zhejiang: Regulatory friction for small commodity trade

Zhejiang, especially through its key city of Jinhua and the trading hub of Yiwu, leads in the export of small commodities. While diversification is relatively strong, the nature of these goods – often low-margin and dependent on streamlined customs procedures – makes them vulnerable to new compliance burdens, such as origin tracing requirements or heightened inspection protocols. In the event of retaliatory tariffs or trade friction, Zhejiang’s light manufacturing sector may face disproportionate regulatory costs.

Fujian: Vulnerability in apparel and footwear

Fujian’s export structure is notably concentrated in labour-intensive industries such as footwear and apparel, particularly for Western markets. These sectors are typically among the first affected by protectionist measures and face increasing scrutiny around labour and environmental standards. In a climate of escalating trade tensions, Fujian-based manufacturers may need to explore production diversification or shift toward non-Western markets.

Inland Provinces: Lower exposure, growing strategic role

By contrast, inland provinces such as Sichuan and Chongqing are less dependent on traditional Western markets. Their integration into global supply chains is increasingly supported by diversified routes, particularly through the China-Europe Express and regional connectivity initiatives under the Belt and Road framework. These logistics corridors not only reduce geographic dependency but also enhance resilience against unilateral trade actions.

Strategic takeaways for exporters and investors

Amid evolving global trade dynamics and rising tariff risks, both businesses and policymakers face mounting pressure to adapt. The shifting geography of trade exposure, combined with China’s proactive policy environment, offers several strategic insights for stakeholders navigating this complex landscape.

Assess risk and diversify strategically

Export-oriented companies – particularly those concentrated in high-exposure coastal provinces or sectors like consumer electronics, apparel, and automotive components – should reassess their risk profiles:

Geographic exposure matters: Firms must evaluate how susceptible their operations are to region-specific vulnerabilities, including reliance on markets facing trade tensions (e.g., the US and EU) or industry-specific regulatory scrutiny.

Diversification is key: Developing alternative markets, leveraging multilateral agreements, and exploring underutilised logistics routes such as the China-Europe Railway Express can reduce overdependence on volatile bilateral corridors. Similarly, investing in digital trade channels and bonded warehouse solutions can increase operational flexibility and reduce customs friction.

Navigating today’s trade landscape demands a combination of operational agility and policy foresight. For exporters, this means understanding geographic and sectoral vulnerabilities, while for policymakers, it calls for structural investments that spread resilience more evenly across China’s vast economic landscape.

By taking a long-term view, stakeholders can better prepare for the shifting realities of global trade and secure a more stable position in the next phase of economic globalisation.

This post was originally publish by Dezan Shira & Associates’ China Briefing with the title Mapping tariff risk: Which Chinese cities are most exposed to foreign trade?

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Announced on 4 April 2025, China’s move to restrict rare earths came as a direct counter to US President Donald Trump’s latest tariffs, unveiled just days earlier, which slapped a 50% levy on Chinese imports. Beijing’s response targets samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, minerals essential for high-tech manufacturing, from electric vehicle (EV) batteries to military hardware. For British businesses, deeply entwined in these global networks, the implications are immediate and far-reaching, raising questions about supply security and strategic adaptation in an increasingly volatile world.

The export restrictions don’t constitute an outright ban but introduce a licensing system, a mechanism likely to prioritise China’s domestic needs and allies over Western rivals. Reporting on the announcement, The Wire China described it as “a sweeping response” designed to “squeeze supply to the West of minerals used to make weapons, electronics, and a range of consumer goods.” Noah Berman, writing for The Wire, framed it as a calculated “tit-for-tat escalation,” reflecting Beijing’s frustration with Trump’s aggressive trade policies. The timing aligns with a broader pattern of retaliation – China has flexed its rare earth muscle before, notably in 2019 when President Xi Jinping toured a magnet factory amid an earlier US-China trade spat. Now, with Trump back in the White House and tariffs reinstated, Beijing is doubling down, leveraging its near-monopoly on these critical resources.

China produces around 90% of the world’s rare earths, a group of 17 elements that underpin modern technology. The seven targeted in this latest move are particularly vital – dysprosium and terbium power high-performance magnets in EVs and wind turbines, while scandium strengthens aerospace alloys. Mark A. Smith, CEO of NioCorp Developments, called it “a precision strike by China against Pentagon supply chains,” a sentiment that resonates beyond the US to NATO allies like Britain. The UK, with no domestic rare earth mines, relies heavily on imports, often processed through China’s vast refining network. Defence giants like BAE Systems depend on these materials for fighter jets and missiles, while the EV sector – think Jaguar Land Rover’s ambitious electrification goals – faces potential cost spikes and delays as supply tightens.

Since the initial announcement, further developments have sharpened the picture. Bloomberg reported on 7 April 2025 that China’s curbs “threaten to disrupt the global supply of key materials used widely in high-tech manufacturing,” with analysts forecasting an 18% rise in battery costs by 2026 if alternative sources aren’t secured. This echoes concerns around China’s Made in China 2025 strategy, which aims to dominate high-tech industries globally. Adding fuel to the fire, a massive, million-tonne rare earth deposit was uncovered in China in March 2025, according to mining.com, bolstering Beijing’s confidence in its resource leverage. For British firms, already grappling with post-Brexit trade complexities, this is a stark reminder of their exposure.

The UK imported £1.2 billion in rare earth-dependent goods in 2024, from smartphone components to renewable energy tech, much of it tracing back to Chinese processing. SMEs in particular lack the scale to pivot quickly, risking disruptions if licenses favour China’s domestic players or friendly nations like Russia. Yet amid the threat lies opportunity. The EU, which sources 98% of its rare earths from China, is racing to “reshore” supply chains – a blueprint Britain could follow. Pensana’s rare earth processing hub in Saltend, Yorkshire, backed by government grants, offers a glimmer of hope, though full-scale production is years away. Meanwhile, Australia’s Lynas Rare Earths, a rare non-Chinese supplier, is expanding its Texas facility with US support, a project the UK could tap into via trade deals. Japan provides another model – since 2020, it has slashed its China dependency to below 50% through diversification and recycling, a strategy British firms might emulate.

This isn’t just about economics; it’s geopolitical chess. China’s move signals displeasure with the US and tests Western resolve. For the UK, balancing relations with Beijing and Washington is tricky – post-Brexit trade talks with China remain sensitive, yet siding too closely with Trump’s tariffs could invite reprisals. Analysts see cracks in China’s dominance, however. A March 2025 study from the Chinese Academy of Sciences, cited by the South China Morning Post, predicts that Africa, South America and Australia could challenge China’s edge within a decade. Reuters noted that rising investment in Greenland’s rare earth deposits could shift the balance, with Canadian and British firms already eyeing stakes. For now, though, Beijing holds the reins – and isn’t shy about pulling them.

The fallout is already stirring debate. Increases in global rare earth prices, which will push up the cost of things like EV components, are likely to hit British SMEs hardest, urging them to audit suppliers and lock in contracts with non-Chinese sources where possible. Larger firms might press Westminster for tax breaks or R&D funding to bolster domestic capabilities, a call echoed by the UK’s Critical Minerals Strategy, launched in 2022 but yet to fully prioritise rare earths alongside lithium and cobalt.

Looking ahead, Britain must act decisively. Partnerships with resource-rich allies like Canada and Greenland could diversify supply, while joint ventures with Lynas or Japan’s Dowa Holdings might bridge the gap. The government could accelerate Pensana’s timeline with targeted incentives, mirroring the US’ $1 billion rare earth investment under Trump. For businesses, the message is clear: adapt or risk being sidelined. As the US-China trade war heats up, Britain’s challenge is to navigate the rare earth crosshairs with agility and foresight.

This isn’t a one-off skirmish but a wake-up call. These latest controls expose the fragility of global supply chains and threaten further destabilisation if tensions persist. For British industry, the stakes are high: defence, green tech and economic competitiveness hang in the balance. The UK must chart a path that safeguards its interests while seizing the opportunities this upheaval presents.

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From evolving trade policies to technological decoupling, this article gives a brief overview of what we know so far about what Trump 2.0 means for China.

Whither the US-China trade war

A defining feature of Trump’s first term was the US-China trade war, characterised by tariffs on hundreds of billions of dollars in Chinese goods. While no immediate tariffs were announced in Trump’s first day in office, a trade memo directed the government to scrutinise US trading relationships and evaluate China’s compliance with the 2020 US-China Economic and Trade Agreement.

There were some signs of détente in the form of a meeting between Elon Musk and Chinese Vice President Han Zheng just before the inauguration, where Han reportedly invited US firms including Tesla to deepen investments in China and Musk reaffirmed Tesla’s commitment to expanding cooperation with China.

Nonetheless, this measured start is unlikely to extend into the long term. Trump’s approach to trade will focus on securing tangible, short-term wins for the US, often without regard for broader strategic consequences. Moreover, China is in a weaker economic position than it was during the opening salvo of the trade war, as it faces a sticky real estate crisis, rising youth unemployment and depressed consumer confidence.

The TikTok question

For an example of Trump’s strategic unpredictability in US-China relations, we need only look to his handling of the TikTok controversy. During his first term, Trump ordered a ban on the Chinese-owned app, citing national security concerns. However, on 20 January 2025, Trump signed an executive order to delay the enforcement of a law requiring TikTok owner ByteDance to sell its US operations to an American or allied buyer or face a ban for an additional 75 days. After going dark for a few hours on Sunday, an announcement on the app credited Trump as its saviour. The TikTok decision underscores Trump’s tendency to use high-profile cases as leverage for broader concessions – especially if they benefit him, as TikTok did during his campaign. China will have to navigate the risks and opportunities of this transactional policymaking.

Decoupling in technology

Despite his TikTok reprieve, technology will remain at the heart of Trump’s US-China policy.

His first term saw the blacklisting of companies such as Huawei, and restrictions on semiconductor exports – actions that disrupted China’s tech ecosystem. The Financial Times reports that further measures targeting critical technologies – such as artificial intelligence and quantum computing – are likely to curb China’s ambitions in these fields.

For China, the emphasis will shift to achieving self-reliance. The Made in China 2025 strategy, which aims to reduce dependence on foreign technology, is poised to take on even greater importance. However, Beijing faces significant hurdles, including its reliance on advanced semiconductor manufacturing equipment from US-aligned countries. While China has made progress in innovation, it remains constrained by gaps in high-end technologies, a vulnerability that Trump’s policies will continue to exploit.

Geopolitical rivalries in Asia

Trump’s “America First” agenda has historically created openings for China to expand its influence across Asia. However, his second term may see a recalibration of this strategy. Trump is likely to adopt a more assertive stance in the Indo-Pacific, leveraging alliances to counterbalance China’s growing clout.

This renewed focus aligns with Trump’s broader goal of containing Beijing’s regional ambitions, particularly in the South China Sea. Nevertheless, Trump’s transactional diplomacy could undermine the unity of these alliances. For example, his demands for increased defence contributions from allies like Japan and South Korea may alienate key partners, inadvertently strengthening China’s position in the region.

Conclusion: A high-stakes four years

Trump’s second term presents both challenges and opportunities for Beijing, from potential trade resets to heightened risks of technological decoupling and geopolitical competition. For policymakers on both sides, managing this complex relationship will require balancing immediate priorities with long-term strategic considerations.

China’s response to Trump’s agenda will be closely watched worldwide. Whether Beijing chooses to double down on self-reliance or seeks avenues to de-escalate tensions, the stakes are immense for the global economy and international stability. As the two superpowers continue their strategic rivalry, the international community can only hope for a path that avoids escalation and fosters cooperation on pressing global issues.

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Although Trump’s re-election will be felt globally, few countries are likely to be affected quite like China. Trump is a champion of isolationism and the architect of the US-China Trade War and sweeping tariffs on Chinese goods. China was a focal point in his recent campaign, where he pledged a blanket 60% tariff on Chinese imports. Yet Trump is known to embellish, and his promised iron-fist approach to China may not unfold exactly as people expect.

To start, a 60% tariff would not bode well for the middle Americans who voted for him, hoping for a return to the pre-outsourcing-to-China days – not during his presidential term, anyway. During the last tariff hike, businesses quickly realised how complex, fragmented, and China-dependent supply chains had become.

Reshoring manufacturing from China to the US is not straightforward. Most manufactured goods require numerous components, many of which are made in China and thus still exposed to these tariffs. This became evident with the last set of tariffs. Given the reliance on China for so many goods and components, the biggest impact of new tariffs would be higher prices and inflation in the US – one of the main pain points for the Biden administration and a primary driver of change.

In the longer term, some businesses may look to diversify to other manufacturing locations. However, the challenges of shifting supply chains out of China, coupled with China’s unique advantages as a manufacturing powerhouse, mean that China is likely to remain the world’s factory during Trump’s second term and beyond.

Despite gloomy predictions after Trump’s first round of tariffs, China’s global share of exports has risen by 1.5% since before Trump’s first presidency – over three times the growth rate of the next highest region, Latin America, according to the IMF.

Another card China holds in its relationship with a Trump-led America is Elon Musk. Musk has donated more than $118 million to support Trump’s 2024 campaign, heavily supported him on X, and has been named government efficiency tsar, even accompanying Trump on his post-election call with Ukrainian President Zelensky. While Musk can be as unpredictable as Trump, he has significant exposure to China, with over half of all Teslas manufactured at its Shanghai factory. Musk has often expressed respect for the Chinese people and their innovations, and has supported some of their policy directions that are unpopular in the West. Trump also has close ties with Apple, Blackstone and other companies with significant interests in China.

Regardless of how much inflationary concerns, the role of Elon Musk or other business interests temper Trump’s policies toward China, Beijing is likely to double down on efforts to reduce its reliance on US exports. We can expect to see a stronger focus on driving domestic consumption in China, aiming to increase its contribution beyond the 49.9% of GDP growth seen in the first three quarters of this year – a promising sign for brands targeting Chinese consumers.

While a Trump-led America may fuel nationalism in China, Beijing could take a similar approach to Trump’s last presidency. If Trump once again adopts an “America-First” isolationist stance, Xi might reiterate to the global community that China is open and welcoming, not isolating. Encouraging Russia to end its war could be a strategic move to regain some favour with Europe.

With Beijing supporting an open world, countries like the UK, Australia, New Zealand, Europe, and potentially Canada may benefit from positive brand exposure, along with an influx of students and tourists who would have traditionally chosen the US, reaping the associated halo effect.

China won’t be without challenges under a Trump presidency – neither will the rest of the world. Geopolitical tensions will persist, yet it may not spell the doomsday for China that some predict.

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