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China Reduces Foreign Reliance; Tariff Whiplash Sows Uncertainty By Liz Young

China is racing to make itself less reliant on the outside world's products and technology, part of a yearslong effort by leader Xi Jinping to make China more self-sufficient as tensions with the U.S. rise.

The WSJ's Brian Spegele, Jason Douglas and Yoko Kubota report that in many ways, the strategy is succeeding. Beijing has poured hundreds of billions of dollars into industries such as high-end manufacturing and is making more of its own robots and medical devices instead of relying on foreign firms. The success of China's electric-vehicle makers and artificial-intelligence upstart DeepSeek has ignited fears that China might eclipse the West in some sectors.

Beneath those wins, however, Xi's industrial policy is hugely expensive, eating up state resources as government revenues are stagnating. Large sums have been wasted on projects that failed, especially in areas such as advanced semiconductors.

The flood of investment pouring into Chinese factories is also causing problems for China abroad. Enormous quantities of Chinese goods are being pushed onto foreign markets at cut-rate prices, exacerbating trade tensions.

Economists warn China needs to find new growth levers now to offset the drag on its economy from a languishing real-estate sector and a darkening global backdrop for trade.

China's vehicle sales fell in January . (WSJ) China's state-owned Dongfeng Motor Group and Chongqing Changan Automobile may merge in a deal that would create the country's largest automaker. (South China Morning Post) CONTENT FROM: PENSKE LOGISTICS Gain a Closer Look. Gain Ground with Penske Logistics.

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Government & Regulation

U.S. businesses are finding it difficult to respond to President Trump's new tariffs without knowing the administration's ultimate trade goal. The WSJ's Justin Lahart, Ruth Simon and Paul Kiernan write that the president's moves to impose duties on some imports while delaying others have created intense uncertainty among business owners who aren't sure which policies will stick.

A sheet metal fabricator in Minnesota says it's holding off on investment and hiring after repeated changes in tariff policy. The owner of a Pennsylvania-based online office-supplies retailer is asking its Chinese manufacturers for a 10% discount to offset the cost of higher tariffs. She also plans to look for alternative suppliers in Vietnam but said that will take months - and she's worried Trump will enact tariffs on Vietnam, too.

Their experiences illustrate the tough decisions business owners face as they seek to restructure their supply chains to reduce their exposure to a potentially prolonged trade war.

Ford CEO Jim Farley said the threat of tariffs and other policy changes have resulted in chaos for the auto industry. (WSJ) Aluminum tariffs could boost the price of Coca-Cola, which imports aluminum from Canada for its U.S. soda cans. (WSJ) Quotable Number of the Day In Other News

U.K. consumer spending in January rose at the fastest pace in two years. (The Times of London)

Boeing delivered 45 planes in January, the highest level since before last year's fuselage-panel blowout. (WSJ)

BP is expected to refocus on core oil-and-gas assets after activist hedge fund Elliott Management took a stake in the oil major. (WSJ)

Chemical and materials manufacturer DuPont said sales in its artificial intelligence-related business jumped by 30% last year. (WSJ)

Exports of French wine and spirits declined in 2024 . (WSJ)

Golf cart maker Massimo Group is bolstering U.S. production and weighing partnerships in Vietnam. (Dow Jones Newswires)

South Korean shipbuilder Hanwha Ocean signed contracts to build two LNG carriers for affiliate Hanwha Shipping. (Splash 247)

Japan's SG Holdings acquired airfreight forwarder Morrison Express. (Air Cargo News)

Online shopping giant Temu is overhauling its Chinese supply chain in the face of Trump's new tariffs. (Bloomberg)

Health food maker Hain Celestial opened a fourth U.S. distribution center in Savannah, Ga. (Supply Chain Dive)

About Us

Follow the WSJ Logistics Report team: @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

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

(END) Dow Jones Newswires

February 12, 2025 07:03 ET (12:03 GMT)

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