China’s trade-war revenge

From The Australian. Here's what's on the front. I'm Christa naming it. It's Thursday, April seventeen, twenty twenty five. Half of the international students enrolled at the Queensland University of Technology were phantoms. The Australian is revealing today the university's annual report shows the students never turned up to class and then dropped out. But it's keeping mum on where they came from and where they went. That exclusive story is live right now at the Australian dot com dot au.

There's nothing a Chinese factory can't make. Let me tell you.

The Secret has many Chinese supplies, but they just.

Stop a minute.

Brooks Brother, a premium shirt bran from the States, actually produce most of their products on China.

Does urble Lemon have OEO factories in China.

Of course, yes, but because it's only five to ten dollars.

For days, videos like these have flooded the TikTok feeds of American consumers. Chinese manufacturers and suppliers stand in front of vast workshops and stacked warehouses, and they claim to produce luxury clothing and accessories for some of the world's best known brands for a fraction of the cost.

Our strongest suit is that we were the real OEM factory for those luxury brands.

We know how to make them real, we know how to make them good.

And they say they're prepared to cut the American public a deal. Buy direct from me, and I'll give you a good price.

Ten dollars and ten dollars, oh, ten dollars.

This need a were hot, If you'll need less contact with me. If you want to source both with good quality and low prices, ontape me.

The Americans are eating it up.

They probably should have took this app away when they had the chance, because the Chinese manufacturers just hit them folks with the Uno reverse.

The Chinese manufacturers woke up and chose total violence today and I've never supported anything more in my life.

What are the American companies going to do? Because they can't do.

Anything, and some of the American TikTok creators have seized the opportunity to boost their own profiles.

Guys, if you like real Birkenstocks and you want them for super cheap, one tenth the price of normal, follow me.

I'm gonna drop where I get them.

And it was already just about to make a whole series talking about designer clothes and what they actually cost, So this would be great to amplify that.

Listen, I don't know how this tariff thing is going to play out, but the way that the Chinese manufacturers are playing their hair absolutely well done, tends across the board.

The mockery of America by Chinese social and state media is just the latest in the escalating trade war between the United States and China. In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world.

Reciprocal that means they do it to us, and we do it to them.

Beijing not backing down in the face of Washington's latest tariffs, imposing an additional eighty four.

Percent levy on the US starting from tomorrow.

Donald Trump says he is open to talks with Chinese President Shijing Ping after imposing an even higher tariff of one hundred and twenty five percent on China.

Word China is now ratcheting up its tariffs on American goods to one hundred and twenty five percent.

Just in the last few moments, the BBC has confirmed that US tariffs against China add up to one hundred and forty five percent. And it's the manufacturers who are exacting revenge or trying to survive, depending on who you ask.

A great channel is just a euphemistic way of saying an illegal channel, right, This is to get a good made in China into America without paying the tariffs.

Will Glasgow is the Australian's North Asia correspondent. I caught him on a break from the Canton Fair in Guangzhoo. It's the largest trade fair of its kind on the planet and a kind of barometer for China's performance in the global marketplace.

An example of that that I was told by a maker of massage machines America is the biggest market for his factory.

Tied with South Korea, and so.

The workaround that he's got for his business going forward is they're just looking for a partner in Vietnam. Now, I thought that meant and asked him, you mean you're going to set up a factory in Vietnam, and he said, no, we're just going to get a partner and we'll send them the stuff and then they'll put them in a different box and right made in Vietnam and then send it into America. So that's a very brazen grade channel. I had heard that was going on. I've heard rumors

The Trump administration has said it'll crack down on countries that facilitate this passage of Chinese products into the US via these grade channels as you've described them. Has it said how it plans to do that.

The President at times has just complained about that rather than explaining how he would go about stopping it. And the most detail, and it's not much detail at all, was from his trade advisor Piternovaro, who said, in essence, if you do that, countries like Vietnam, we will punishue with high tariffs. It's possible after the ninety days have passed that in an effort to close this channel down, Vietnam gets higher tariffs.

That could happen.

That would mean the channel wouldn't exist anymore. Right, they could just collect the tariff from Vietnam. There wouldn't be any incentive for the Chinese company to do that.

But if the model's not.

Actually moving a factory, it's just finding someone to receive the good and then change the label and send it on. Obviously, you could imagine the American administration just ending up in

Officially, around fifteen percent of China's exports go to the United States, but it also sends partially finished goods to regions like Southeast Asia and Mexico who add the bells and whistles and then sell those products into the US market. Top officials say they're not concerned if that evaporates, because they'll just diversify their foreign trade. But Will says there's a lot more at stake than Beijing is letting on.

Oh.

Look, privately it's definitely worried, but publicly it's presenting a confident, unruffled demeanor.

Now the trade data shows that's lunatic. Right.

America is the biggest trade destination for Chinese goods. So yes, they're getting on doing business with everybody and trying to grow.

Those are the markets.

But they can't just grow so much that one fifth or thereabouts.

From America wouldn't hurt, right.

But by speaking to the factory owners themselves, this stuff matters, and you wouldn't be taking that risk unless the market really mattered and there was big profit to be made, you know.

And the thing is, it's Chinese workers who'll bear the brunt if it all goes south.

The research for analysts at Goldman Sachs estimate between ten to twenty million workers in China are vulnerable to or whose jobs are very much determined by Chinese trade into America.

So that's a huge number.

Now, of course, China is an enormous country, but it's not nothing, and unemployment here has already been ticking up because.

Of broader economics slowdown and.

Other problems in the property sector that.

Have gone on for years.

So job losses increase because of trade troubles with China's biggest partner won't help again. China wants to project confidence because it doesn't want to be forced into negotiating with America, and it doesn't want Trump thinking that it's vulnerable and weak, so it needs to make a deal. So it's trying to show the opposite. And right now you see quite a gap between the confidence of the Chinese government and the real world lives of the business people that's speaking.

About coming up while Chinese vendors are confident Trump's tariffs won't stick. On Monday, President Hi Jimping touchdown in Vietnam, the later stop on his tour of Southeast Asia. It's part of Beijing's efforts to promote China as a defender of international trade. The Chinese capital government officials are drawing up plans to hit America where it hurts. Here's will Glasgow.

This is one they've identified as a real superpower that Chinese have. They dominate the production of heavy rare earth minerals. These businesses are very environmentally damaging. The margins allows the often you have to put a lot of investment to make not very much, so that's been the reason only China's had it and no one else has. But there's huge strategic advantage will benefit to them because without them,

And it's a.

Real clear example of China trying to give itself leverage in this ongoing trade tussle with America.

But getting the Trump administration back to the negotiating table might be more difficult than the Chinese Communist Party anticipated. On Tuesday, White House Press Secretary Caroline leave It read verbatim this statement from the President.

Look, the President has made his position on China quite clear, although I do have an additional statement that he just shared with me in the Oval Office. The ball is in China's court. China needs to make a deal with us. We don't have to make a deal with them. There's no difference between China and any other country, except they are much larger. And China wants what we have. What every country wants what we have the American consumer, or to put in another way, they need our money.

Still, the Chinese manufacturers spooking their wares at the Canton Fair this week are feeling confident their government's brand of hardball could just.

Work for these manufacturers. They've been in this business for decades, and the supply chain down here in Guangdong and the south of China, and this is called the factory of the world, it's just extraordinary that they're set up down here. It's such a sophisticated, huge operation, but all run on tiny margins. The only way it works is by a huge volume that they turn out. But in essence, it's a business model that makes absolutely no sense in America.

This is what the manufacturers are all very aware of.

And then from that comes a confidence that he's going to have to walk it back. That's very much been emboldened by the carve out he's given.

Smartphones and laptops.

While I don't see see a lot of this business coming back to America, in fact, I see almost none of it.

The margins make no sense.

If the president did keep a regime where tariffs and China were very high, but on say Vietnam, Indonesia, Mexico, other countries with lower labor costs, they were lower or stayed where they are right now. And if in addition to this, he got the tools, however, he would do this to stop to crack down on those grade channels. If he could crack down on that, then if he can stick to it. With the passage of years, as people look to replace factories, it seems inevitable that things

Will Glasgow is The Australian's North Asia correspondent. You can read all his reporting and analysis of China's trade moves right now at the Australian dot com dot au