How China has amped up its factories and is threatening to crush US industry with a new ‘tsunami’ of cheap products
A $1.9 trillion “tsunami” is headed for American industry — and it’s coming from China.
The Communist country of 1.3 billion people has shifted that much cash into amping up its factories in just four years in an effort to overwhelm manufacturers around the world with an influx of cheap goods.
President Trump’s 125% tariff on all Chinese imports into the US — which he announced Wednesday as he paused steep duties on most other countries — is actually just the latest protective measure against China.
The European Union, Brazil, Mexico and Thailand have either imposed new tariffs in the last few months or are considering such measures to protect their own industries from Chinese imports.
“The tsunami is coming for everyone,” Katherine Tai, trade representative for former President Joe Biden, told the New York Times.
Over the past four years, China has pulled money from housing construction and put it into building factories, with state-controlled banks granting industrial borrowers almost $2 trillion in extra financing, according to new data from China’s central bank, obtained by the Times.
China is building new factories nonstop and outfitting old ones with the latest tech, churning out products from cars to phones to fertilizer at an unprecedented rate — and all bound for foreign shores.
The Times reported that China is set to overtake Germany with the world’s largest car factory. Chinese carmaker BYD is building not one but two plants that are bigger than the current record holder in Wolfsburg, Germany.
Overall Chinese exports rose a whopping 13% in 2023 and 17% in 2024. Exports make up about 20% of the country’s GDP.
Meanwhile, American exports — which were higher than ever 10 years ago — are slumping. Exports only account for 11% of the US GDP — down from 13.6% in 2012.
US exports to China in particular fell almost 3% last year, to a total of $144 billion, according to the US Trade Representative’s Office.
The trade deficit also widened, hitting $295 billion.
Imports from China, however, hit almost $440 billion — up nearly 3% year-over-year after falling dramatically in 2023.
To compete with China’s manufacturing behemoth, many countries are already building their own great walls. Last year, Brazil raised tariffs on Chinese metal and fiber optic cable exports. The EU raised tariffs on Chinese EVs to 45.3% to protect its own auto industry.
Earlier this year, Mexico proposed matching the US tariffs on China. And Thailand proposed amending its free trade zones to impose a 7% duty on low-value goods from China.
Trump’s unprecedented tariff on Chinese goods could similarly shield the US from the coming wave.
Steep levies on cars, for example, have already stopped cheap Chinese EVs from decimating the American auto industry.
But it’s already too late for some local manufacturers. Chinese imports to Thailand have caused manufacturing in that country to plunge by 50%, ASEAN Briefing reported last year.
