The Wall Street Journal: Despite the tariff increase, Chinese sellers remain confident, saying it no longer makes sense to sell everyday items to Americans. Yiwu - At the world's largest wholesale market in this eastern Chinese export hub, American customers have vanished. Americans or their agents once purchased various goods here, from Paw Patrol plush toys, Panama hats to toy sniper rifles. The renowned Yiwu International Trade City has 75,000 merchants and an area exceeding the total of over 1,000 American football fields. For decades, most of its products have been shipped to demand-hungry American consumers at low prices. However, with the recent tariff hike by the Trump administration (the rate surged to 145% last week), these goods have lost their price advantage for American buyers. Yet, when reporters from The Wall Street Journal visited, merchants expressed confidence, believing they could survive through orders from other countries. They also expressed slight confusion: where will Americans now get shiny keychains, baseball caps, and coffee thermoses? For daily necessities like socks, merchants frankly admitted that substitution is not easy. "Their buyers might be able to procure from other countries, but can those countries produce as efficiently as China?" said Zhou Li (surname), a sock manufacturer from Shenli. "China's manufacturing capability is truly remarkable." The Yiwu market consists of five large zones, each with multi-story buildings. The first floor of Zone Four specializes in socks, most of which are produced in Zhuji, a nearby city known as the "World Sock Capital," according to official Chinese media. Xinhua News Agency reported that one street in Zhuji produces about 25 billion pairs of socks annually, accounting for approximately one-third of global sock production. Data from the International Trade Center Trade Map shows that in 2023, China accounted for 56% of U.S. sock imports. However, socks are a low-margin product. Manufacturers stated that lowering sock prices to offset the 145% U.S. tariff (paid by importers) is not feasible for producers. This means importers need to cut their own profits, pass on higher prices to American consumers, or find other countries offering low-cost socks to keep feet warm and comfortable. Yang Aihua (surname), head of Zhuji Today Vision Company, a sock manufacturer at the wholesale market, typically exports around 500,000 pairs of socks annually to the U.S. She said that after the tariff increase this year, orders from the U.S. market have stopped. On Friday, she was waiting for a reply from an overseas client while the Trump tariff news continued to circulate. Behind her was an English signboard with a poem about socks: "A pair of socks, warm as spring sunshine, soft as sheep. The comfort of toes feels like a gentle embrace... Every day it accompanies you, warm as home." Yang Aihua, 46, introduced that Today Vision's socks are produced by over 200 workers in Zhuji factories, priced at approximately 25 cents per pair or slightly higher. About 30% are sold in the U.S., the rest in China and other overseas markets. Yang noted that the most popular style in the U.S. market is simple solid-color, 100% cotton designs. To get the socks to American consumers' feet, multiple steps are involved. Now, after receiving customer orders (usually traders), Today Vision spends 7 to 10 days producing the ordered socks. The products are then shipped by sea, taking about a month, before being sold in major U.S. retailers and online platforms, Mr. Yang explained. Other countries, especially Pakistan, Honduras, and El Salvador, also mass-produce socks. If large orders from China were interrupted, these countries might fill some gaps. But China's price and speed advantages supported by a vast workforce of skilled laborers are difficult to surpass. If American consumers turn to other countries, they may face higher costs, and suddenly transferring millions of pairs of sock orders elsewhere might encounter capacity constraints. The U.S. may yield or reduce tariffs. New guidelines released late Friday evening showed that smartphones, laptops, storage chips, and other electronics would be excluded from what Trump referred to as "reciprocal tariffs." Chinese sellers may also offer discounts to U.S. buyers to maintain circulation of goods. However, sock sellers currently stated that to continue selling to the U.S., they cannot further drastically lower prices. Wang Chunyan (surname), a salesperson at another Yiwu sock wholesaler "Big Foot," said that about one-third of her factory's income depends on the U.S. market. She mentioned that perhaps they could have coped with a 20% tariff on Chinese goods, but the current tax rate exceeding 100% is unsustainable. "At this level of tariffs, we simply cannot take U.S. orders," she said. Zhou, the manager at Shenli in Zhuji, said her company produces about 1.2 million pairs of socks monthly. It is a family business by Chinese standards, with a relatively small scale employing about 20 people. Before U.S. orders suddenly dried up recently, Shenli shipped around 200,000 pairs of socks every three to four months to the U.S., Zhou said. Besides pure cotton socks, her American buyers usually prefer printed socks. She pointed to the sample socks hanging on the booth wall, showing designs such as beer mugs, kiwis, Santa Claus beards, and TikTok logos. "We're just a small factory, not comparable to big enterprises. Imagine the output of all of Yiwu – this means the economic strength and production scale of this region are indeed impressive," she said. Zhou said the impact of the disappearance of U.S. orders is relatively limited because Shenli only relies on 10% of its total revenue from the U.S. market. She claimed that her small factory is resilient, and many similar Chinese companies can continue operations under Trump's tariff policies. "Nationwide, it's impossible not to be affected at all," she said. But she emphasized the resilience of Chinese manufacturers because Americans are looking for alternatives. "We don't depend on them; we rely on ourselves," she said. Original article: https://www.toutiao.com/article/1829428321773568/ Disclaimer: This article solely represents the author's personal views.