Chinese manufacturing facilities are experiencing widespread shutdowns and worker layoffs as the intensifying trade conflict with the United States severely impacts export orders. With U.S. tariffs now reaching 145% on most Chinese goods, factory owners across the country report American customers are canceling or suspending orders en masse.
The effects are being felt across multiple industries, from apparel and appliances to electronics and plastics. Workers have shared evidence of idle production lines and factory closure notices on social media, while industry representatives describe mounting anxiety among Chinese merchants.
The Shenzhen Cross-Border E-Commerce Association, representing over 2,000 Chinese businesses, reports its members are instructing factories to halt or delay deliveries. Some facilities have suspended operations for one to two weeks, while others are reducing overtime and weekend shifts.
In Fujian province, a plastics factory worker confirmed their export orders had vanished, leading to a temporary shutdown. More severely impacted is DeHong Electrical Products in Dongguan, which placed workers on minimum-wage leave for a month due to suspended client orders. Management cited “significant near-term pressure” and is scrambling to find alternative markets.
The situation is particularly concerning given China’s limited social safety net. As furloughs turn into permanent job losses, the impact could snowball rapidly. Some companies, like Hangzhou Stellarmed, a medical equipment manufacturer primarily serving U.S. markets, are already helping workers search for new employment opportunities.
Factory managers express uncertainty about the duration of these disruptions. In Dongguan, a plastic mold manufacturer has eliminated weekend overtime, while a toy factory in Zhejiang provided workers approximately two weeks of leave due to their heavy reliance on U.S. orders.
While the full scale of factory suspensions remains unclear, labor experts suggest this could trigger a long-term restructuring of China’s manufacturing sector, with workers bearing the brunt of the impact. Though smartphones and some electronics received exemptions from the highest tariffs, the broader tech sector remains apprehensive about being drawn into the expanding trade conflict.
Local governments in major export hubs like Shenzhen and Dongguan are implementing support measures to stabilize foreign trade, including subsidies for international trade show participation and expanded export insurance coverage for canceled U.S. orders.
Some manufacturers are attempting to pivot to other markets. A manager at Ningbo Taiyun Electric, which produces hair styling appliances, reported they’ve resumed limited production focusing on European orders after a brief shutdown. However, finding replacement markets of comparable scale to the U.S. presents a significant challenge.
Economic experts at UBS project China’s growth will decline to 3.4% this year due to the trade war’s demand shock. While China reported a record trade surplus approaching $1 trillion last year, its response to U.S. tariffs has included implementing a 125% levy on American imports.
Although U.S. President Trump has expressed willingness to discuss trade issues with Chinese President Xi Jinping, Beijing appears reluctant to initiate such talks. However, analysts suggest mounting unemployment pressure from factory closures could eventually force China’s leadership to seek negotiations.
The situation threatens to create significant economic and social instability in China’s manufacturing regions unless a resolution to the trade dispute can be reached or alternative markets can be developed to absorb displaced production capacity.