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China's Factories Nix Discounts as Tariffs Rise; Trump Presses to Salvage U.S. Shipping By Mark R. Long

Even before yesterday's sharp escalation in U.S. tariffs against China , order cancelations were mounting for Chinese factories, and manufacturers there say they can't lower prices any further for their American customers.

The Journal's Hannah Miao and Raffaele Huang write that some Chinese factory owners had offered price cuts to U.S. buyers earlier in the year to help them manage two 10% tariff hikes President Trump imposed after returning to the White House. Big retailers such as Walmart and Amazon had asked Chinese manufacturers for discounts to keep store prices low and protect market share. But with tariff rates ratcheted up to 125% as of Wednesday, following Beijing's retaliatory 84% duty on U.S. goods, manufacturers can't discount further without operating at a loss .

Some manufacturers say they are willing to lose orders from U.S. companies and find buyers elsewhere-or even idle output-if they must. U.S. importers would then be stuck bearing the lion's share of the tariff burden, which would likely get passed on to American consumers. Shipments from China to the U.S. could plunge by more than half in coming years if duties remain in place, according to Capital Economics.

Beijing's strategy to hit back at Trump goes well beyond tariffs , targeting companies that bank on their China ties. (WSJ) Amazon canceled some vendor orders from China after tariffs were announced, according to e-commerce consultants. (WSJ) European Union members approved an initial list of U.S. goods that will be subject to tariffs. (WSJ) China's top leaders are looking to foster closer ties with neighboring Asian countries amid the trade fight with the U.S. (WSJ) Where Trump's Tariffs Stand Now

The president's reciprocal tariffs on so-called bad actors in trade went into effect just after midnight yesterday. Hours later, however, Trump announced a 90-day pause on the higher rates-except for China. He raised duties on Chinese imports to 125%.

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Quotable Sea Power

Trump is targeting China at sea, too, ordering agency heads to draw up plans to resurrect America's moribund maritime industry to counter Chinese dominance in ocean shipping.

The WSJ Logistics Report's Paul Berger writes that the executive order Trump signed yesterday gives officials up to seven months to find ways to resurrect domestic shipbuilding and the maritime workforce. Both are vital for economic prosperity and national security, the order says. It sets out a framework for planning to rebuild America's maritime industrial base as a counterweight to China's dominance in shipbuilding, port crane manufacturing and its rapidly growing fleet of naval and commercial ships.

The order references a U.S. trade representative proposal to impose hefty fees on Chinese-built or flagged ships calling at U.S. ports. This proposal drew howls from a swath of U.S. industries, which fear higher freight rates, fewer port calls by carriers and delayed deliveries. In response, the WSJ's Costas Paris writes, the USTR is adjusting this plan to ease the impact on U.S. exporters.

The U.S. defense secretary secured new commitments from Panama but left some officials wondering if they were sufficient to counter threats to "take back" the canal. (WSJ) CK Hutchison denied Panamanian legal claims and defended its contract to run two Panama Canal ports that are part of a nearly $23 billion deal. (South China Morning Post) Phone Home

Trump's tariffs aim to bring manufacturing back to the U.S., including the iPhone.

The WSJ's Joanna Stern and Nicole Nguyen write that Apple's cash cow is a patchwork of sophisticated parts, sourced from many countries and primarily assembled in China . The U.S. has neither the facilities to match the Chinese plants, nor the skilled workforce. This makes it essentially impossible to build the full stack of iPhone components and put them together in America, a panel of experts said.

However, it wouldn't be completely crazy to shift some of that manufacturing stateside. Even this would require moving some key component making to the broader North American region, with parts from Mexico and Canada, and maybe even Europe. It would also call for a dramatically increased number of skilled U.S. workers.

iPhone assembler Luxshare Precision Industry will maintain large-scale production in Vietnam and continue exports from there to the U.S. (WSJ) Number of the Day In Other News

China's auto sales rose sharply in March, thanks to ongoing government subsidies and relatively muted price competition. (WSJ)

Volkswagen's vehicle deliveries rose in the first quarter after gains in North and South America and Europe offset a steep decline in China. (WSJ)

Prada's talks to acquire Versace from Capri Holdings are at risk of collapsing at the 11th hour amid historic financial-market turmoil. (WSJ)

Constellation Brands is selling some of its lower-priced wine brands amid a restructuring, and forecast slower growth for its beer brands. (WSJ)

The Dutch Coast Guard undertook a rescue mission in the North Sea after an explosion triggered a fire on board a German-owned containership. (Splash 247)

The European Union finalized a regulation aimed at improving handling of the plastic-pellet supply chain to reduce microplastic pollution. (The Maritime Executive)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

April 10, 2025 07:04 ET (11:04 GMT)

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