Chinese foreign trade enterprises actively respond to US 'reciprocal tariff'

Editor's note: The article was written by Ma Xiaobai, a director and researcher at the Development Research Center of China's State Council, and Liu Yumeng, doctoral candidate at Renmin University of China. It reflects the authors' opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

On Friday (May 2, 2025), the United States officially ended its duty-free treatment for small parcels worth less than $800 from the Chinese mainland and Hong Kong Special Administrative Region.

This policy shift has sharply driven up logistics costs in cross-border e-commerce, posing an existential threat to many small and medium-sized foreign trade enterprises reliant on direct shipping. 

In the face of tariff shocks, China's Ministry of Commerce is spearheading efforts to integrate domestic and foreign trade, with internet platforms, retail giants, livestream e-commerce operators and foreign trade enterprises working collaboratively to overcome these challenges.

Firstly, active efforts have been made to promote the transition from exports to domestic sales. 

China's vast domestic market offers a crucial buffer and strong support for foreign trade enterprises. 

Platforms such as Alibaba, JD.com, and Meituan have given the green light to "premium export products," creating integrated online and offline platforms to help foreign trade enterprises swiftly enter the domestic market.

In order to address potential gaps in digital capability among foreign trade enterprises during this transition, e-commerce platforms are providing real-time sales data and analytical reports to assist in identifying the product categories best suited to the domestic market, thereby minimizing selection failures. 

For foreign trade enterprises in need, platforms also offer comprehensive support, including storefront design, brand storytelling and integrated on- and off-platform marketing to enhance overall brand development.

Secondly, Chinese enterprises have continued to diversify international markets. 

In light of US tariff policies, Chinese enterprises are reducing their dependence on the US market. 

A survey by the China Council for the Promotion of International Trade showed that nearly 50 percent of foreign trade enterprises plan to scale back their US operations, while 75.3 percent intend to expand into emerging markets to offset declining exports to the US.

While seeking alternative growth markets, Chinese enterprises are tapping into the potential of emerging economies such as Southeast Asia and Latin America to mitigate policy risk. 

In March alone, orders placed by Argentinian and Chilean companies surged by 101 percent and 70 percent, respectively. 

In addition, stabilizing traditional markets is equally critical. 

Given the increasing uncertainty in the international landscape caused by frequent shifts in US tariff policy, it is imperative to forge deeper economic and trade ties with Belt and Road partner countries and work together to create a broader framework for peaceful development.

Thirdly, vigorous efforts are being made to enhance supply chain resilience. 

Chinese enterprises are restructuring their overseas warehouse and platform models to mitigate the adverse effects brought about by the termination of the "de minimis" exemption. 

The overseas warehouse model, capable of faster delivery, lower logistics costs and better customer experience, has emerged as a viable alternative for many direct shipping enterprises. 

In January, China's State Taxation Administration introduced a "tax refund upon departure" mechanism for cross-border e-commerce goods exported through overseas warehouses, providing further policy support for the development of this model. 

Foreign trade enterprises are actively seizing this opportunity to pursue faster logistics, smoother customs clearance and more efficient distribution, thereby accelerating the development of cross-border e-commerce in China.

As the world's second-largest economy and second-largest consumer goods market, China will remain steadfast in advancing high-standard opening-up and staying on its path of high-quality development in the face of US tariff bullying.

Through steady growth, the country will inject greater certainty into the global economy, demonstrating the robust resilience and vitality of the Chinese economy to the world.