The clothing factories of China are confronted with a turning point after new rates

Liu Miao has sold clothing on Amazon to wholesalers in the United States for the past five years. That trade has stopped abruptly.

Mr. Liu has a small factory in Guangzhou, long the center of the very competitive clothing industry of China. He and other factory managers, who are already dealing with tight profit margins, said last week that the combination of rates and President Trump New tax on cheap input Had cut deep into their company. The costs along the supply chain are also higher.

The rates have made it impossible for Mr Liu to keep selling on Amazon, where he earned about $ 1 on every item of clothing, but now only 50 cents. And he felt that he could not lower the wages of his employees, Mr. Liu said, while employees pressed a labor market along his motorcycle, which he had parked on the sidewalk with a clothing sample draped over the wheel.

“You can’t sell anything to the United States now,” said Mr. Liu. “The rates are too high.”

Platforms such as Amazon, Shein and Temu Brought the vast supply chain from China to the door of the world. These online market places made it possible for thousands Guangzhou’s small factories To reach shoppers in the United States. And because packages of less than $ 800 can enter the United States tax -freeThe factories and in turn could charge the platforms very low prices.

Export is one large driver of China’s economic growth in recent years. Things have been particularly good in e-commerce. In a Guangzhou district, foreign luxury cars-Mercedes-Benzes, BMWs and Cadillacs were parked outside of factories that pay employees about $ 60 a day to make clothes that are sold on apps such as Shein and Amazon.

But now as commercial tensions Force the world’s two largest economies apart, many companies in Guangzhou are confronted with a turning point.

The rates aggravate several challenges that the clothing makers are confronted with. It is becoming more difficult to make a profit, since the Chinese government has had difficulty issuing consumers more after the collapse of the country’s real estate market. Without the rising home values, many Chinese limit their expenses.

That damaged things for Zhang Chen, which had six clothing stores in the central province of Hubei. But when Shoppers did not return after the COVID-19 Pandemie and the rent remained high, he decided to close them all.

“Things did not return in 2020 and in 2021 it still didn’t come back. By 2022 when it was still the case, it seemed that it never returned,” said Mr. Zhang. Now he earns around $ 100 a day and delivers freshly sewn clothing to Shein collection points near the airport.

The factories in Guangzhou are not the Automated Electing electric vehicles or the production campuses make semiconductors who are the key to China’s years to protect geopolitical resilience by Advanced technology. Nevertheless, the clothing factories of China employ millions of employees who earn a living.

In interviews, nine factory owners and managers in Guangzhou said they are considering moving their activities, some to provinces such as Hubei, 600 miles away, where they could pay employees lower wages. A few owners said that they might be able to move to countries like Vietnam, where many Chinese factories have been set up to prevent potential new rates as high as they have already been set to China export.

Many reported falling orders. Others said they had suspended some production lines. All describe looking at adjacent companies in recent months closed their doors.

On Friday as the American policy To put an end to the tax-free input from China came into force, Liu Bin packed his vast clothing factory where piles of Shein packages were pressed against the windows.

Mr. Liu’s factory specializes in dresses and tops that are meant to be worn at a beach party or a date night, and Shein usually buys around 100,000 pieces per month. But in April, after the company ordered about half so much, he started moving his production line to the neighboring province of Jiangxi. He could no longer pay himself rent in Guangzhou.

Mr. Liu said that Shein offered stimuli to cover the costs of moving operations to Vietnam, and he had considered it: “But then the rates at Vietnam also became higher.”

He said he had also tried to find buyers on Tiktok and Temu, but there were orders on every platform. “They all fall, and we just wait,” said Mr. Liu.

Shein did not respond to a request for comment. Temu said on Friday that it had stopped shipping China products directly to buyers in the United States.

The Chinese government has been encouraging Domestic e-commerce platforms To help small companies sell to their home market. But because the Chinese consumers are careful with spending, it will be difficult for factories to sell as much in their own country as they exported.

Han Junxiu, who sells novelty socks on Shein and Temu, said that she doubted whether the American government would be able to suddenly start collecting rates for cheap packages, which entered the United States at a speed of four million a day.

“I just don’t think it’s so realistic,” said Mrs. Han after closing her stand for the night on the Canton Fair, the annual export fairs of Guangzhou.

Fluffy socks for pajamas parties are some of its most popular products.

This is precisely the kind that Americans still have to buy from Chinese companies, said Mrs. Han. “Where else will they buy all this?” she asked.

Siyi Zhao contributed research.