Tariff Thursdays – US vs China: Chinese Electronics and Semiconductor SMBs (May 30–June 5, 2025)
How Tariffs are Shaking China's SMB Electronics Sector and Rattling U.S. Supply Chains
Chinese Electronics SMBs Struggle Under Tariffs
Export Declines in Key Tech Hubs: China’s major electronics manufacturing centers are feeling acute pain from U.S. tariffs. Shenzhen – often called China’s Silicon Valley – saw exports plunge 16.6% year-on-year in Jan–Feb 2025, even as national exports eked out 2.3% growth. High-value sectors like consumer electronics and machinery (concentrated in Shenzhen) were hardest hit, reflecting how escalating geopolitical tensions and tariffs have choked demand. In Q1 2025, Shenzhen’s exports were down 8.7% in value, a stark contrast to China’s overall 6.9% export rise – a jump driven by firms rushing out goods before new U.S. tariffs took effect. Local officials warn that many enterprises face high costs, insufficient orders, and heavy foreign trade pressure as the tariff war drags on. Inland tech centers are not immune either; companies in Chengdu and Suzhou report similar order downturns and uncertainty, underscoring a broad-based strain on small and mid-sized exporters.
Keep reading to get a clear picture on where the impacts are, and how you can react to them accordingly.
Factory “Holidays” and Layoffs: As U.S. orders dry up, some manufacturers in export hubs have resorted to temporary shutdowns or “factory holidays” to cut losses. In Guangdong’s electronics belt, firms have halted production lines and slashed work hours, telling workers to stay home as warehouses fill with unsold stock (a stark turnaround from the usual spring export rush). Many SMBs are stuck with inventory they can’t ship, forcing them to fire-sell goods on domestic e-commerce platforms at bargain prices to recoup cash. These desperate measures point to rising underemployment and mounting financial stress among China’s smaller suppliers.
Relocations to Avoid Tariffs: A growing number of Chinese electronics producers are responding by relocating operations to third countries. Southeast Asia is a prime destination – the number of Chinese manufacturers setting up in Vietnam has boomed since the 2018–19 tariff rounds, and the trend is accelerating. Consultants in Ho Chi Minh City report assisting “one or two Chinese companies a week” to establish factories in Vietnam. By moving assembly outside China, these firms can sidestep U.S. import duties (at least until now). However, Washington is watching these shifts closely; the Biden/Trump administration has warned it may target tariff circumvention via third countries, putting even these relocated SMEs on edge.
As a result, we can start really understand the toll on China’s smaller manufacturers: collapsing U.S. orders, frantic cost-cutting, hurried relocation plans, price haggling with buyers, and even potential shutdowns. For many, profit margins were thin to begin with – tariffs of 20%, 50%, even 100%+ have swiftly made U.S. business untenable without drastic changes. In short, U.S. tariffs are forcing China’s electronics SMBs to reinvent or perish, with impacts rippling through factory towns in Shenzhen, Dongguan, Suzhou, Chengdu and beyond.
Alignment with Dual-Use Tech and Military Applications
Pivot to Domestic “Self-Reliance” Projects: Cut off from reliable U.S. demand, some Chinese tech firms are increasingly aligning with Beijing’s self-reliance initiatives – including sensitive dual-use and military sectors. Under the government’s military-civil fusion policy, civilian companies (even smaller ones) are being encouraged to contribute to defense and strategic industries. This trend has only accelerated as overseas markets falter. Orders from Chinese state programs – 5G infrastructure, aerospace, defense electronics – are providing a lifeline for certain SMBs that once exported to the West. For example, local media reports suggest some electronics workshops in Shenzhen have begun taking contracts for the PLA’s supply chain (e.g. ruggedized drone components or radar subassemblies), filling gaps left by foreign tech imports. Likewise, semiconductor SMEs that lost U.S. customers are refocusing on domestic clients like state-owned telecom and weapons firms who need “secure” made-in-China parts. This shift helps China’s self-sufficiency drive while keeping these firms afloat.
Support for Allied Militaries (Dual-Use Exports): There are signs that Chinese companies have ramped up indirect support for allied militaries, particularly Russia’s, in lieu of civilian trade. Western intelligence reports indicate Chinese firms are supplying critical dual-use components to Russia’s defense industry, blunting the effect of U.S./EU sanctions. By early 2025, an estimated “80% of the critical electronic components found in Russian drones” were of Chinese origin. These are often commercial-grade chips, sensors, and electronics repurposed for military UAVs and missiles – items Chinese SMEs can readily provide. Indeed, Ukraine’s intelligence chief recently revealed China is covertly furnishing at least 20 Russian military factories with machine tools, speciality chemicals, electronics components, and gunpowder for weapons production. Beijing denies direct involvement, but U.S. officials have accused China of sending “vital dual-use goods” to boost Russia’s war machine. Small Chinese exporters appear to be shipping through shell companies and murky networks to fill Russia’s vast demand for everything from basic chips to aviation parts.
This growing dual-use alignment is fueled by China’s tech self-reliance push. Rather than let factories go idle, authorities tacitly approve (or at least tolerate) sales of excess capacity to friendly nations’ defense sectors. It serves mutual interests: Chinese firms find alternative revenue, and partners like Russia get much-needed electronics for fighter jets or drones that they can no longer source from the West. Domestically, China is also stockpiling strategic tech components and encouraging SMEs to develop indigenous substitutes for imported tools. For instance, dozens of small Chinese companies have sprung up to produce semiconductor fabrication equipment and materials – explicitly aiming to replace U.S. and Japanese suppliers over time. Some of these companies, while civilian on the surface, have obvious military value (e.g. producing chips for satellites or encryption devices). In summary, tariffs and export bans are pushing China’s tech SMEs closer to state-directed, dual-use roles – whether by supplying China’s own military modernization or quietly arming geopolitical partners. This strategic realignment could have long-term security implications, as more of China’s industrial base becomes entwined with defense production.
BRICS+ Cooperation and Decoupling Efforts
For more context, see our post on BRICS+, what it is, and what that means for Americans.
Emerging “Tech Bloc” Among BRICS Nations: The tariff and tech war has galvanized China and fellow BRICS+ members to deepen their industrial cooperation. Beijing is actively positioning BRICS as a counterweight to Western supply chains, promoting joint innovation and manufacturing within the bloc. In late May 2025, the BRICS Industry Ministers meeting in Brasilia affirmed a “commitment to resilient and inclusive supply chains” and endorsed programs to help SMEs adopt Industry 4.0 technologies and partner across member countries. A new BRICS Centre for Industrial Competence was launched with UNIDO support, and working groups on Smart Manufacturing, Digital Transformation, and SMEs are now set up to facilitate cross-border projects. The aim is to reduce dependence on Western tech ecosystems by pooling the strengths of BRICS economies.
Joint Tech Initiatives: Recent BRICS forums have showcased plans for joint R&D and production in electronics and semiconductors. At the 2025 BRICS Engineering Congress in Shenzhen, experts from China, Russia, India, Brazil, and partners stressed that multilateral cooperation is vital to “mitigate technological disparities and reduce reliance on Western supply chains.” There is talk of establishing joint manufacturing zones and innovation hubs – for example, Belarus (a BRICS partner) discussed collaborating with China on new materials, nanotech and machine-tool building, leveraging each country’s expertise to build capabilities outside U.S. control. Similarly, Russia and China have been coordinating on semiconductor development: both have poured funds into domestic chip equipment industries and have shared goals to achieve basic self-sufficiency in chip fabrication and tooling. China, dominating in areas like chip packaging and testing, is helping Russia which lags in those areas, while Russia’s push on older-node chips and materials (e.g. 90–180nm processes) complements China’s needs for less advanced but sanctioned tech. This synergy extends to defense electronics as well – for instance, Russian defense firms now rely heavily on Chinese-made components (from simple circuits to optical devices) given Western bans. The BRICS bloc (potentially expanding to include sanctioned states like Iran) is thus increasingly trading amongst itself for high-tech parts, creating a parallel supply network insulated from U.S. pressure.
Electronics Trade Decoupling: Trade data underscore this decoupling: as Chinese exports to the U.S. dropped over the past year, its tech trade with fellow BRICS and “Global South” partners has grown. Exports of Chinese electronics to Southeast Asia, Africa, and Latin America have surged enough to offset some U.S. losses – and some of those goods likely end up re-exported to the U.S. via third countries. Meanwhile, Russia now imports 90% of its chips from China, according to industry reports, and India has invited chip companies from Taiwan and China to help build its nascent semiconductor fabs【24†L39-L44**]. In the defense realm, Moscow and Beijing have markedly increased tech sharing since 2022. Beyond components, China is reportedly assisting Russia with know-how in drone technology and electronic warfare kit, blurring lines between “BRICS” civilian cooperation and strategic military aid. All these moves point to a BRICS+ that is building an alternative electronics supply chain infrastructure – through new joint centers, trade agreements, and strategic alliances – to lessen the leverage of U.S. tariffs and export controls.
Ripple Effects on U.S. Supply Chains
Empty docks and idle cranes at a Chinese container port reflect the sharp drop in exports amid tariff pressures. U.S. import volumes from China have plunged, raising concerns about supply shortages for key goods.
Logistics Bottlenecks and Delays: The tariff turbulence has created whiplash in global logistics, which is now affecting U.S. companies. When an unexpected 90-day tariff truce was announced in mid-May, Chinese exporters rushed to ship backlogged orders, causing a surge of cargo that snarled ports and drove up freight rates. Freight forwarders in Shenzhen describe “container rollovers” – so many containers flooding in that ships leave port without loading them all, pushing shipments to later vessels. The cost to ship a container from China’s coast to the U.S. West Coast jumped by ~$1,500 in a matter of days during the rush. Yet this was a temporary rush; the bigger picture is a steep downturn in volumes. By late April, container bookings from China to the U.S. had dropped about 60% as tariffs bit hard. The Port of Los Angeles (a key gateway) saw incoming shipments fall 10% year-on-year in one week, and officials warned arrivals could plunge 30–35% in the following weeks. In short, trade lanes are rebalancing: shippers diverted capacity elsewhere earlier in the year when tariffs rose, then scrambled back during the truce, and now may sail half-empty as Chinese exports dry up. This volatility makes U.S. supply lines unpredictable – containers aren’t where they’re needed, and lead times are swinging. Logistics firms say it’s “like watching two children play a game” with trade policy, and they’re making contingency plans that exclude the U.S. market altogether.
Shortages and Component Scarcity: With the pipeline of Chinese goods constricting, early warning signs of shortages in the U.S. have appeared. Major retailers such as Walmart and Target have openly warned the White House that if tariffs remain sky-high, store shelves could start emptying this summer. Many retailers stocked up inventory ahead of tariff hikes, but those buffers will run out within weeks. The Port of LA reports that five product categories are most at risk: furniture, auto parts, clothing, plastics, and footwear – everyday items of which America imports huge volumes from China. Crucially, auto parts and electronics components are among these, raising alarms in the automotive and consumer electronics industries. U.S. auto manufacturers fear delays in replacement parts and components for new vehicle production; some specialized electronic parts (like circuit boards, connectors, sensors) that countless small Chinese firms supply could become harder to source, potentially stalling U.S. assembly lines in automotive and telecom equipment. Industry analysts note parallels to early pandemic disruptions: if the trend continues, “we could see COVID-like shortages in stores” with certain electronics and tech gadgets back-ordered for months.
One strategic choke point is raw materials. In retaliation for U.S. tariffs, China imposed export controls on rare earth elements in April 2025, which threatens to hit U.S. high-tech manufacturing and defense supply chains hard. Beijing’s curbs cover rare earth magnets and ores vital for “weapons, electronics and a range of consumer goods,” effectively squeezing U.S. and allied producers who depend on China’s 90% monopoly in this field. American companies are now scrambling for alternate sources of neodymium, dysprosium, and other critical minerals used in EV motors, missiles, and smartphones. This move starkly illustrates how the tariff war is spilling into supply chain warfare: by weaponizing its dominance in materials, China could force slowdowns at U.S. defense contractors (e.g. Lockheed Martin’s missile production or radar systems) and drive up costs for tech giants like Tesla and Apple that rely on rare-earth-based components. All told, the U.S. faces a one-two punch of supply disruptions – fewer finished goods coming from China due to tariffs, and now potential input shortages (metals, parts) as China leverages its own export restrictions.
Sectors Feeling the Pinch: Several U.S. industries are already seeing impacts or bracing for them:
Electronics & Consumer Tech: Importers of consumer electronics report longer lead times and price increases on items sourced from Chinese OEMs. Small telecom equipment vendors say certain network components (like Chinese-made circuit boards) are harder to get, causing project delays. Smartphone and gadget launches could be delayed if critical components from China don’t arrive on schedule. Some laptop and TV models may run low in stock by fall, retailers caution, if the tariff standoff isn’t resolved.
Automotive: U.S. auto parts distributors rely heavily on Chinese suppliers for everything from brake rotors to electronic sensors. With auto parts among the top categories at risk, repair shops might face longer wait times for parts and higher prices. Automakers also worry about specialized electronic components (chips, battery materials) sourced from China. Notably, one Chinese EV battery material firm (Lopal) announced plans to build a plant overseas to keep serving global EV makers despite tariffs – highlighting that EV supply chains are being redrawn under tariff pressure. U.S. EV startups, in particular, could face hiccups if battery components don’t ship on time.
Retail and Consumer Goods: Beyond high-tech, everyday consumer goods are feeling strain. Tariffs of 100%+ have made many Chinese-made products prohibitively expensive; some U.S. small businesses simply stopped ordering. For example, a boutique U.S. apparel brand that manufactures in China told CBS it “will have to abandon the goods and close the company” if tariffs don’t ease. Such anecdotes reflect a broader trend: 33% of small U.S. importers have paused imports to rethink strategy in light of the tariffs. This sudden halt means less variety and stock for consumers and potential cash flow crises for those businesses.
In summary, the U.S. is starting to feel the upstream and downstream shocks of the tariff battle. Shipping disruptions and input scarcities are creating new fragilities in supply chains, just as many companies were recovering from the pandemic-era turmoil. The coming months will test whether alternate suppliers and stockpiles can fill the gap or if Americans will see more “out of stock” signs on everything from car parts to consumer electronics.
Financial Impacts on U.S. Firms and Market Adjustments
Cost Shock to Import-Dependent Companies: American companies that depend on Chinese SMBs for components or assembly have been hit with higher costs and uncertainty. The blanket tariffs – some as high as 145% on Chinese goods – essentially act like a massive tax on importers. Profit margins are getting squeezed at firms large and small. Big retailers like Walmart and Target, which source billions in electronics and goods from China, warn they “will have to raise prices for consumers” and may face inventory gaps. Walmart’s CFO noted that continued tariffs mean price hikes are inevitable on many products. For smaller U.S. businesses, the situation is often dire: many cannot absorb the tariffs and remain viable. Kristin Bear, owner of lingerie brand Kilo Brava, said if 100%+ tariffs persist, “We’ll just have to abandon the goods and close the company.” Her firm, like countless niche brands, relied on affordable Chinese manufacturing; the tariff bill now wipes out her entire profit, turning her inventory into a loss. Such stories are playing out in electronics too – e.g. a Midwest-based audio equipment importer saw its Chinese amplifier costs double with tariffs, forcing it to consider layoffs or even bankruptcy unless it can find a non-Chinese supplier quickly.
Stockpiling and Supply Diversification: In response, market participants are rapidly adjusting strategies. Late last year, anticipating trouble, many importers rushed to stockpile Chinese goods before tariffs hit. Those warehouses of inventory provided a short-term cushion. Now that buffer is depleting, and some are scrambling to replenish during the brief tariff pause. In fact, some U.S. buyers raced to snap up any ready-stock that Chinese factories had on hand during the 90-day truce, effectively hoarding supplies in case tariffs jump back up. This “panic buying” is reminiscent of pre-hurricane preparation – it boosts inventories temporarily, but also drives up shipping costs and leaves future orders uncertain.
Longer-term, companies are diversifying their supply chains at an unprecedented pace. Import data shows a clear shift: as of 2024, electronics imports from ASEAN to the U.S. doubled their share compared to 2017, picking up slack from China. Vietnam, Thailand, Malaysia, Mexico – all are seeing more orders from U.S. firms that previously sourced everything from China. Flexport reports bookings from Vietnam/Thailand are up 5–10% as manufacturers scramble for tariff-free sourcing. For example, an American telecom hardware startup that used to get circuit boards from Shenzhen is now trialing suppliers in Malaysia and Taiwan. Shifting production isn’t easy or quick – it requires vetting new partners, investing in tooling, and sometimes quality trade-offs. But many firms feel they have no choice. A survey by Freightos found one-third of small U.S. importers have paused new orders from China entirely while they reassess and seek alternatives. This great supply-chain reorientation has short-term costs (expedited freight, dual sourcing overhead) but is seen as necessary insurance against unpredictable tariffs.
Financial Market Responses: Investors and financial markets have also reacted to these disruptions. U.S. companies with heavy China exposure have seen their stock prices swinging with each tariff announcement and pause. When the tariff truce was unveiled in May, U.S. equity markets rallied on relief; shares of major tech firms and retailers climbed, reflecting hopes that cost pressures might ease. Conversely, days earlier when an April tariff hike was signaled, the S&P 500 had one of its worst single-day drops since 2020. Corporate earnings calls in Q1/Q2 2025 are full of references to tariff impacts: many U.S. electronics and appliance companies have downgraded profit forecasts, citing higher input costs and supply delays. For instance, a U.S. electronics contract manufacturer noted that 30% tariffs on components forced it to renegotiate contracts with its clients and eat some of the cost, cutting its margin by several percentage points. Some costs are being passed to consumers (fueling inflation), some absorbed by producers, and some pushed back onto Chinese suppliers – a delicate juggling act. Notably, Chinese partners are often agreeing to split the tariff burden to keep U.S. business; e.g. Fuling (the Chinese tableware supplier) said its major U.S. clients demanded it cover a portion of the tariff costs to retain their orders.
Strategic Adjustments: Beyond pricing, U.S. firms are making strategic moves to cope. A number of electronics companies have accelerated “reshoring” or “friend-shoring” plans – shifting assembly to the U.S. or allied countries. The U.S. government’s own policies (like semiconductor subsidies) dovetail with this: for example, some American tech firms are considering bringing final assembly of electronics back to U.S. soil to bypass tariffs, even if key parts still come from Asia. Others are investing in automation to offset the higher costs of non-Chinese production. On the defense side, the Pentagon has begun funding efforts to boost domestic production of certain microelectronics and rare earth processing, to reduce vulnerability to Chinese supply curbs.
Financially, this decoupling is painful in the short run – costs are up, efficiencies down – but companies and investors are starting to view it as the “new normal.” The tariff war has essentially imposed a new risk calculus: heavy reliance on Chinese SMBs is now seen as a liability that commands a risk premium. In response, market participants are reallocating capital: logistics firms are investing in capacity on alternative routes (e.g. India–US shipping lanes), venture capital is flowing into Latin American manufacturing startups, and insurance companies are tweaking trade disruption coverage. All of these adjustments have real costs that ultimately feed back into prices and earnings.
In summary, U.S. businesses are adapting through a mix of price hikes, supply diversification, and operational shifts, but not without friction. The impact on the bottom line is evident – from small importers on the brink of collapse to multinationals warning of slimmer profits. As tariffs and countermeasures persist, we can expect continued pressure on U.S. companies dependent on Chinese electronics SMBs, until new equilibrium supply chains are established. The events of this spring have underscored a fundamental truth: in a globally entwined tech sector, trade walls bring collateral damage, and both Chinese manufacturers and American consumers/businesses are paying the price.
Chinese Electronics Manufacturers Hit Hard by U.S. Tariffs (SMEs in Key Hubs)
DeHong Electrical Products Co. (Dongguan)
Specialty: Electrical components & small appliances
Region: Dongguan, Guangdong
Impact: Production halted – Put workers on one-month leave at minimum pay after U.S. clients suddenly paused orders, citing “significant near-term pressure” from tariffs. U.S. orders dried up, leaving the factory idle and cash flow strained.
Risk: High (heavily reliant on U.S. market; operations temporarily shut).
Hangzhou Stellarmed
Specialty: Medical devices (endoscopy kits)
Region: Hangzhou, Zhejiang.
Impact: Market collapse – Focused on endoscopy kits for U.S. hospitals; with tariffs up to 145%, American demand evaporated. The firm told employees to seek other jobs as it’s uncertain “how long this will go on,” essentially bracing for potential closure.
Risk: High (U.S. was primary market; facing existential threat).
Ningbo Taiyun Electric
Specialty: Electrical appliances/equipment
Region: Ningbo, Zhejiang
Impact: Partial shutdown – Halted production on April 12 when U.S. orders stopped, and only partially resumed to fulfill European orders. Managers are scrambling for non-U.S. customers, hoping U.S. policy reversals will allow a rebound.
Risk: High (large U.S. exposure now only offset by EU sales; operations scaled down significantly).
Dongguan Yuanguan Technology
Specialty: Plastic molds & components
Region: Dongguan, Guangdong
mpact: Severe slowdown – Once ran overtime and weekends, now cut back to only a few hours a week of operation as U.S. tariff impact killed overtime demand. The company froze hiring and slashed work hours directly due to lost U.S. orders.
Risk: High (major revenue loss; drastic reduction in output).
Smoore International (Shenzhen)
Specialty: E-cigarette devices & vape components
Region: Bao’an, Shenzhen
Impact: Tariff squeeze & relocation – The world’s largest vaping device maker relies on the U.S. for ~37% of revenue. Facing triple-digit tariffs, Smoore was “first hit” among its peers, with ~$10B of U.S.-bound product at risk. It is fast-tracking an overseas factory in Indonesia to shift production and mitigate U.S. tariff impact.
Risk: High (heavy U.S. dependence; moving production offshore to survive).
Absen
Specialty: LED display screens
Region: Shenzhen, Guangdong
Impact: Margin pressure – A leading LED panel exporter, ~15% of sales go to the U.S.. Tariffs have not halted orders but are squeezing profit margins, forcing Absen to consider price hikes and cost cuts to offset the 145% duties. Management expects U.S. revenue to stagnate or dip as a result.
Risk: Medium (moderate U.S. share; can raise prices but at risk of losing price-sensitive customers).
Unilumin Technology
Specialty: LED displays and lighting
Region: Shenzhen, Guangdong
Impact: Adaptive response – Unilumin moved early to diversify: it acquired a U.S. firm (Trans-Lux) to enable local U.S. production and spread sales globally. North America is important (they sell mid-to-high-end screens there), but with a “balanced layout” across Asia, Africa, LatAm, its dependence on U.S. is reduced and it can pass on costs to less price-sensitive clients.
Risk: Medium-Low (U.S. tariffs manageable due to local production and premium pricing power).
Leyard
Specialty: LED displays & systems
Region: Beijing (manufacturing in Shenzhen & abroad)
Impact: Diversified workaround – About 20% of Leyard’s smart display revenue comes from North America, but most U.S.-destined units are built in Slovakia or by its U.S. subsidiary (Planar). It also shifted focus to Asia/Africa/LatAm markets in recent years, cutting reliance on any single region. Overall, tariffs have only a limited impact on Leyard’s business, thanks to its overseas assembly and broad market spread.
Risk: Low (global production footprint largely shields it from U.S. tariffs).
Mulinsen (MLS Co.)
Specialty: LED lighting (bulbs, fixtures)
Region: Zhongshan, Guangdong
Impact: Price hikes & offshoring – One of China’s largest lighting firms (owns LEDVANCE/Sylvania), heavily exposed to U.S. lighting demand. To offset tariffs, Mulinsen raised product prices (effective May and again in June 2025) and is shifting more production to its new factory in Mexico. The Mexican plant (opened Q3 2024) is ramping up to supply the U.S. tariff-free under USMCA, giving Mulinsen a first-mover advantage in avoiding tariffs.
Risk: Medium (U.S. market was significant, but proactive relocation and price strategy are softening the blow).
Sunshine Lighting
Specialty: Lighting products (bulbs, lamps)
Region: Zhejiang, China
Impact: Cost management – With U.S. tariffs raising industry costs, Sunshine is taking multi-pronged action: implementing a price adjustment mechanism to pass some costs to U.S. buyers, leveraging its factory in Thailand to reduce dependence on any one market, and focusing on higher-value product R&D to maintain pricing power. These moves aim to buffer the tariff shock.
Risk: Medium (some U.S. exposure, but hedged by overseas base and product differentiation).
Anker Innovations (300866.SZ)
Specialty: Consumer electronics accessories (chargers, power banks)
Region: Shenzhen, Guangdong
Impact: Passing on costs – Anker, one of Amazon’s top electronics sellers, responded to the 145% import duties by raising prices on ~20% of its U.S. listings (127 products saw an avg +18% price increase in April). The company has 5,000 employees and $3B revenue, and it leveraged its strong brand to push costs onto U.S. consumers without immediate loss of market share. Anker also indicated it will explore Europe/SE Asia markets more aggressively.
Risk: Medium (tariffs squeezed margins, but Anker’s pricing power and global expansion cushion the impact).
DJI (SZ DJI Technology Co.)
Specialty: Drones & UAVs
Region: Shenzhen, Guangdong
Impact: Steep tariffs = price surge – Drones were excluded from U.S. tariff exemptions (unlike phones/laptops), leaving them hit with a cumulative 170% U.S. tariff as of April 2025. For DJI, the world leader in drones, this is devastating: popular models like the Mavic could see U.S. retail prices more than double, destroying consumer demand. DJI faces a choice of either absorbing enormous costs or effectively losing the U.S. market. Risk: High (U.S. sales are sharply curtailed; heavy blow to revenue unless policies change).
Luxshare Precision (002475.SZ)
Specialty: Electronics assembly & connectors (AirPods, cables)
Region: Dongguan, Guangdong
Impact: Stock dive & supply-chain shift – As a key Apple supplier, Luxshare was hit hard by tariff fears: its share price plunged 20% after April tariff hikes. The company depends on U.S.-linked orders (e.g. assembling AirPods), so it accelerated moving production to Vietnam and elsewhere to protect its business. With the partial tariff reprieve on consumer electronics, sentiment is recovering.
Risk: Medium (very U.S.-centric client base, but mitigating via overseas expansion).
Lingyi iTech (002600.SZ)
Specialty: Smartphone components (connectors, modules)
Region: Shenzhen/Dongguan
Impact: Order volatility – A mid-sized Apple and Android supply-chain firm, Lingyi saw its stock fall ~18% amid the tariff turmoil. U.S. tariffs threatened its export orders indirectly (through reduced device production). The company has been diversifying manufacturing to Southeast Asia. Risk: Medium (some insulation due to multi-customer base, but U.S. trade policies still jolted its outlook).
Goertek Inc. (002241.SZ)
Specialty: Audio electronics & VR devices
Region: Weifang, Shandong
Impact: Production relocation – Goertek makes AirPods, VR headsets (for Meta), etc., with a large chunk of revenue tied to U.S. tech companies. Tariff fears knocked nearly 18% off its stock value. Goertek responded by shifting production to Vietnam (it’s investing heavily there) to meet U.S. orders tariff-free.
Risk: Medium-High (high U.S. client exposure; significant costs to relocate, but doing so to retain business).
Guoguang Electric
Specialty: Audio components (speakers, acoustics)
Region: Guangdong, China
Impact: Demand shock – Another supplier to U.S. consumer electronics, Guoguang’s share price dropped in tandem (~18%) with tariff escalation. U.S. importers likely halted or cut orders due to cost surges.
Risk: Medium (the company is smaller; a prolonged trade war could be critical, though it may seek non-U.S. markets).
Lens Technology (300433.SZ)
Specialty: Glass screens for electronics
Region: Hunan, China
Impact: Reduced U.S. orders – A major glass supplier for smartphones (Apple, etc.), Lens saw its China-to-U.S. shipments threatened. Its stock fell ~18% during the tariff spike. Lens has begun investing in India and other locales to serve customers from outside China.
Risk: Medium (short-term hit from clients adjusting supply chains; longer-term diversification underway).
Suzhou Dongshan Precision (DSBJ, 002384.SZ)
Specialty: Printed circuit boards & antennas
Region: Suzhou, Jiangsu
Impact: Revenue at risk – DSBJ, which supplies PCB/FPC components for U.S. tech firms, experienced a >20% stock slide post-tariff news. High-layer PCBs from China faced tariffs up to 170%, directly affecting its exports. The company is now expanding production in the U.S. and Southeast Asia to retain key customers.
Risk: Medium (near-term U.S. order reduction, but the firm is actively regionalizing manufacturing to adapt).
“Hechun” E-cig Parts Group (Bao’an)
Specialty: Vape hardware components (atomizers, e-liquids)
Region: Shenzhen (Bao’an District)
Impact: Downstream shutdowns – This privately-owned group (8 factories, ~1,000 workers) makes e-cigarette parts for vaping brands. Over 90% of its output ultimately went to the U.S., so when tariffs spiked, its downstream clients in China halted orders entirely. Some customers canceled orders mid-production or couldn’t clear U.S. customs, leaving warehouses full of unsold stock. The entire group “pressed pause” on production and risked running out of cash.
Risk: High (extreme reliance on U.S.-bound business; operations frozen until workaround channels or tariff relief emerge).
Shenzhen Cross-Border E-Com Sellers (Various SMEs)
Specialty: Consumer gadgets, electronics via Amazon/eBay
Region: Shenzhen, Guangdong
Impact: Exit or price hike – Thousands of small electronics manufacturers in Shenzhen’s export hub rely on online U.S. sales. Facing the 145% tariffs, many are preparing to either sharply raise U.S. prices or quit the U.S. market altogether. The Shenzhen Cross-Border E-Commerce Association warned that margins have evaporated and a wave of exits is looming.
Risk: High (for many, the U.S. market is no longer viable – leading to layoffs or relocation to other markets).
Inventronics (Infitec, 300582.SZ)
Specialty: LED drivers & power supplies
Region: Hangzhou, Zhejiang.
Impact: Buffered by globalization – This mid-sized LED electronics maker reports limited tariff impact so far. It had proactively set up factories outside China and spread its customer base. While tariffs add some cost, Inventronics’ overseas facilities and global sales mean its competitiveness remains intact.
Risk: Low (diversified production insulates it; watching policy but not significantly affected).
Nationstar Optoelectronics (002449.SZ)
Specialty: LED components (LED chips & lamps)
Region: Foshan, Guangdong
Impact: Minimal exposure – Primarily domestic-focused: in first 3 quarters 2024, only ~1.76% of its revenue came from the U.S.. Tariffs thus have very little direct impact on Nationstar’s sales. The company is mostly monitoring the situation and continuing its China-focused strategy.
Risk: Low (tiny U.S. share means it’s largely shielded, aside from general market sentiment).
Songsheng Shares
Specialty: LED lighting (various products)
Region: China (exact city TBD)
Impact: Negligible U.S. sales – Songsheng publicly noted that only ~1% of its revenue comes from the U.S.. Most of its exports go to Europe, S. America, Middle East, etc. Thus, the U.S. tariffs have almost no direct effect on its operations.
Risk: Low (diversified export markets; virtually unaffected by U.S.-China tariff moves).
U.S.-Listed Companies: Exposure Outlook
AAPL – Apple Inc.
Exposure: Extensive China manufacturing & significant sales in China. The trade war put Apple in the crosshairs, but smartphones were spared from new U.S. tariffs in April. This exemption (plus China cutting retaliatory tariffs) eased the worst-case scenario.
Expected Impact: Low (tariff relief on iPhones/iPads means Apple avoids a major cost spike; remaining exposure is manageable).
Recommendation: Buy – Apple received “the most bullish news we could have heard” with the tariff exclusions. Its supply chain proved agile (shifting some production to India/Vietnam), and Chinese consumer demand is rebounding post-reprieve. With trade headwinds easing, Apple’s strong ecosystem and pricing power make it attractive.
NKE – Nike Inc.
Exposure: Apparel/footwear manufacturing in China (~25% of Nike’s goods made in China) and large China market sales (~17% of revenue). Tariffs on footwear and apparel threatened price hikes.
Expected Impact: Medium – Nike announced it would raise prices on various product lines to offset tariffs. However, the 90-day U.S.-China deal (tariffs cut from 145% to 30%) sparked a relief rally in Nike’s stock (+7% on the news).
Recommendation: Buy – Nike has already diversified production to Vietnam/Indonesia, reducing reliance on China. The temporary tariff reduction gives it breathing room to adjust. Given Nike’s strong brand and the stock’s bounce on tariff optimism, investors can be bullish that worst-case tariff impacts are off the table.
WMT – Walmart Inc.
Exposure: The world’s largest retailer imports a vast array of consumer goods from China – from electronics to apparel to seasonal goods. Tariffs as high as 145% threatened significant cost inflation.
Expected Impact: High – Walmart has warned of looming price hikes and product shortages if tariffs persisted. In spring 2025, shipping volumes from China plummeted, raising concerns about empty shelves for certain items. Walmart is shifting sourcing where possible (to Vietnam, India) and pressuring suppliers to cut costs, but not all items can be moved quickly.
Recommendation: Hold – Walmart’s grocery and essentials business is resilient (less directly hit by tariffs), and it can negotiate with suppliers or tweak prices to manage margins. While near-term earnings may see pressure from higher import costs, Walmart’s scale and diversification mean it should weather the storm. A wait-and-see approach is warranted as tariffs could be rolled back further.
TGT – Target Corp.
Exposure: Significant importer of Chinese consumer goods (housewares, electronics, toys, apparel). Target is especially exposed on discretionary product lines that are largely made in China.
Expected Impact: High – Target joined Walmart in warning of price increases and possible product shortages due to the tariffs. Its margins were already thin; the tariff hit could compress them further or dent sales if consumers balk at higher prices.
Recommendation: Sell – Compared to Walmart, Target has a higher mix of non-essentials that consumers can delay buying if prices jump. The tariff-induced inflation poses a risk to Target’s earnings and inventory management. Until there’s clarity on a longer-term trade truce, Target’s stock faces downside risk from weaker sales and eroded profits.
BBY – Best Buy Co.
Exposure: Relies heavily on Chinese-made electronics (TVs, laptops, smartphones accessories) to stock its stores. Tariffs on electronics (aside from phones/computers) significantly raise Best Buy’s cost of goods.
Expected Impact: High – Many gadgets (e.g. smart home devices, peripherals, appliances) from China now carry tariffs in the dozens or hundreds of percent, which could force Best Buy to jack up retail prices or suffer margin hits. The company may see lower consumer demand as prices rise, and supply disruptions in categories where Chinese factories slowed or stopped production.
Recommendation: Sell – Best Buy operates in a low-margin, highly competitive space. Tariff-driven price hikes could send customers to e-commerce alternatives or cause them to delay purchases. With the company warning of the need to raise prices amid tariffs and potential product availability issues, the near-term outlook is poor. It’s prudent to stay out of BBY until trade conditions stabilize.
FDX – FedEx Corp.
Exposure: Global logistics and parcel delivery, with a large chunk of volume in U.S.-China trade flows (express shipments, air cargo).
Expected Impact: Medium – The trade war is a double-edged sword: on one hand, urgent rerouting and supply-chain adjustments can boost express shipments; on the other, overall shipping volumes from China to the U.S. have plunged in 2025. FedEx reported softer demand and even closed some facilities as a cost-cut measure. It’s adding surcharges (“China fees”) to mitigate the de minimis rule changes.
Recommendation: Hold – FedEx is proactively cutting costs (integrating Ground and Express networks) and has lowered earnings guidance citing a “very challenging” market. The stock likely already reflects a lot of bad news. Further tariff relief (e.g. the 90-day pause) could improve volumes slightly. Given FedEx’s aggressive restructuring, it’s worth holding to see if margins improve, but wait for clearer signs of trade stabilization before adding more exposure.
BA – The Boeing Co.
Exposure: Boeing counts on Chinese airlines for aircraft sales (China has been one of Boeing’s largest markets) and also sources certain parts from China. Geopolitical tensions put these at risk.
Expected Impact: Medium – China had been deferring orders of Boeing jets amid the trade war, favoring Airbus. If decoupling accelerates, Boeing could lose significant future sales in China, impacting its long-term order book. However, recent talks and China’s selective tariff exemptions (excluding critical aviation tech) suggest China still needs Boeing’s planes. Boeing’s 737 MAX was cleared in China in 2023, but new orders have been scant.
Recommendation: Hold – Boeing’s fundamentals (e.g. recovering post-Max and post-COVID) are more dominant to its stock than tariffs. While lack of Chinese orders is a headwind, any trade détente could quickly reopen that market. With the stock in a sensitive balance, we’d neither sell (because a deal could spike it) nor aggressively buy (risks remain). Monitor U.S.-China political signals.
CAT – Caterpillar Inc.
Exposure: Sells heavy equipment globally, including China; also imports some components. Tariffs hit both its input costs and the Chinese demand for its machines.
Expected Impact: Medium – Caterpillar projected a $250–$350 million cost increase in Q2 2025 from tariffs if they stayed in full effect. It also expected slightly lower 2025 sales if tariffs persisted. The company hasn’t substantially raised prices yet, hoping for a trade deal. Now, with tariff rates reduced (30% vs 145%) for 90 days, the pressure is easing. Analysts at Baird even upgraded CAT, seeing 2025 as the earnings “trough” with trade tensions likely to abate further.
Recommendation: Buy – Caterpillar shares have upside as tariff impacts recede. The firm’s core markets (construction, mining) are still growing, and it skillfully maintained flat sales guidance excluding tariffs. As negotiations progress, CAT’s headwinds could turn into tailwinds (lower costs, revived China orders). It’s a cyclical stock poised to rebound with any trade peace.
HAS – Hasbro, Inc.
Exposure: Sources ~50% of its toys and games from China; U.S. toy sales are a huge portion of its business. Tariffs threatened to make toys exorbitantly expensive.
Expected Impact: High – Hasbro warned in April that Trump’s tariffs could cost it $100–300 million in 2025 profits if they held all year. The company has been shifting production out of China (aiming <40% from China by 2026), but those changes take time. Good news: on June 2, the U.S. agreed to slash tariffs to 30% temporarily, sparking a rally in toy stocks – Hasbro, Mattel, etc. all jumped on relief that worst-case tariffs were paused.
Recommendation: Buy – Hasbro’s stock has room to run as trade fears subside. The tariff pause allows Hasbro to avoid drastic price hikes during the 2025 holiday season. Moreover, Hasbro’s diversification of manufacturing and strong portfolio of brands position it to bounce back. Accumulate on optimism that a final trade deal (or permanent tariff exclusions on toys) could be reached, which would significantly boost earnings prospects.
QCOM – Qualcomm Inc.
Exposure: Derives a large share of its revenue from Chinese handset makers and licensing in China. Also dependent on TSMC/Samsung (outside China) for chip production, but China is a key end-market.
Expected Impact: Medium – Qualcomm faces two risks: (1) Sales risk – Chinese smartphone demand could falter due to the trade war or nationalist tech policies. Indeed, Chinese retaliation so far has been muted; in fact China exempted some U.S. high-tech goods (like certain chips) from tariffs to avoid hurting itself. This indicates Qualcomm’s products haven’t been blocked – a positive. (2) Policy risk – U.S. export controls (separate from tariffs) on advanced chips to China loom, though Qualcomm’s current phone chips are not as restricted as AI chips.
Recommendation: Hold – Qualcomm’s stock is caught between strong ongoing global 5G demand and geopolitical overhang. The recent tariff cease-fire (90-day partial deal) is a relief that suggests China still needs U.S. chips and is quietly easing tech import barriers, which benefits Qualcomm. However, longer-term decoupling efforts (China pushing homegrown semis, U.S. limiting chip tech) keep the risk level medium. Investors should hold for the generous dividend and wait for clearer signs on U.S.-China tech relations before adding or reducing positions.
Sources
Xiaofei Xu, South China Morning Post, Apr. 29, 2025. scmp.com
Sylvia Ma, South China Morning Post, Mar. 19, 2025. scmp.com
Emily Feng, NPR News, May 27, 2025. ctpublic.org
Qian Lang, Radio Free Asia, Apr. 18, 2025. rfa.org
Ralph Jennings, SCMP, Nov. 29, 2024. scmp.com
Eduardo Baptista, Reuters, Apr. 8, 2025. reuters.com
Lewis Jackson et al., Reuters, Apr. 4, 2025. reuters.com
Business Insider (quoting Ukrinform), May 2025. businessinsider.com
Yuliia Dysa & Pavel Polityuk, Reuters, May 26, 2025. reuters.com
The Economic Times (India), Apr. 30, 2025. economictimes.indiatimes.com
China Briefing and IDC Blog (analysis), Apr. 2025. blogs.idc.com
Global Times (China), Apr. 27, 2025. globaltimes.cn
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