Sino-U.S. Trade War Escalates, Chinese Companies Reliant on U.S. Market Face Severe Challenges
—A Case Study of Enterprises with "99% U.S. Business Dependency"
April 11, 2025

As the Sino-U.S. trade war escalated further in 2025, with total U.S. tariffs on Chinese goods soaring to 125% and global supply chains undergoing rapid restructuring, Chinese companies heavily reliant on the U.S. market have borne the brunt of the crisis. One such example is a Chinese electronics manufacturer, whose 99% of revenue depends on the U.S. market, now grappling with plummeting orders, surging costs, and fractured supply chains.

I. Tariff Pressures Squeeze Survival Space

The company specializes in consumer electronics exports, with the U.S. market as its sole revenue source. However, the 125% tariff imposed by the U.S. since April 2025 has doubled its product prices, drastically eroding competitiveness. Data shows that the trade friction now costs the U.S. $68.8 billion in annual economic losses and impacts approximately 934,000 jobs, while weakened consumer purchasing power further suppresses demand. A company executive revealed: "Order volume has decreased by 60% year-on-year, with some U.S. clients shifting to Southeast Asian suppliers."

II. Supply Chain Shifts Intensify Relocation Pressures

To bypass tariffs, global manufacturers are accelerating production relocation to Southeast Asia and beyond. For instance, multinational giants like Apple and Tesla have moved portions of their capacity to Vietnam and India. Thailand, benefiting from its geographic advantages, labor costs, and policy incentives, is poised to absorb Chinese manufacturing capacity in semiconductors and digital products. While the company has attempted to establish facilities in Thailand, the move cannot offset U.S. order losses in the short term.

III. Dual Pressures: Soaring Costs and Financing Challenges

Tariffs, combined with raw material price hikes, have driven production costs up by 40% year-on-year. Meanwhile, U.S. technology sanctions on Chinese firms have disrupted imports of critical components, further inflating costs. Financial market volatility has exacerbated funding pressures, with the U.S. stock market plunging over 5% in a single day in April 2025, narrowing corporate financing channels.

IV. Countermeasures: Diversification and Innovation

1. Market Diversification: The company plans to expand into markets under the Belt and Road Initiative and RCEP member states to reduce U.S. dependency.

2. Technological Autonomy: Increased R&D investment aims to break through core technology bottlenecks, such as semiconductor chips, to lessen reliance on U.S. tech.

3. Supply Chain Optimization: A "China+1" strategy is underway to build backup production lines in Southeast Asia and shorten U.S. export logistics cycles.

V. Industry Warnings and Policy Advocacy

The company’s plight reflects the profound impact of the trade war on China’s export-driven economy. Experts urge single-market-dependent firms to accelerate transformation, while proposing government support measures:

• Strengthen Regional Cooperation: Deepen trade agreements with ASEAN and the EU to open new markets.

• Tax Relief and Subsidies: Offer temporary export tax rebates for high-tariff industries to alleviate cost pressures.

• Supply Chain Resilience: Promote localization of critical industrial chains to mitigate external risks.

Conclusion

The Sino-U.S. trade war is not merely an economic conflict but a battle for dominance in global supply chains. For Chinese companies overly reliant on the U.S. market, this crisis represents both an existential challenge and an opportunity for transformation. As the International Monetary Fund (IMF) warns: "There are no winners in a trade war." Only through innovation and collaboration can enterprises break through the stalemate and rebuild competitiveness.

Sources: Synthesized from reports by Tencent News, Sohu, NetEase, and others.