YIWU — The owner of a Christmas decoration business in Yiwu, the capital of “made in China,” Zhu Bingbing has seen plenty of U.S. presidents come and go. These days, her business — founded 20 years ago by her parents — exports around the world.
For Zhu, Donald Trump’s return to the White House and China’s ongoing trade war with the United States have not changed much. Despite the 10% additional tariffs which, since Feb. 4, have affected all Chinese products arriving in the U.S., it’s business as usual. On Thursday, Trump said he planned to bump up the tariffs on China an additional 10% from March 4.
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Zhu is not worried because her prices remain very competitive, even if they’re increased for the end customer. “Our U.S. customers are all long-time clients, with whom we have good relationships,” says the 40-year-old Chinese woman in her shop filled with Christmas ornaments, felt figurines and reindeer antler headbands. The cheapest Christmas ornaments cost about $0.04 per unit.
“The impact will be small because our prices are very low. But I have a friend in the textile industry for whom it will be more complicated. She will have difficulty lowering her prices, because she’s already very competitive,” says Zhu, who runs the shop with her husband.
A 6.4 million square kilometer supermarket
During the U.S. presidential campaign, the 75,000 or so wholesalers in Yiwu had nevertheless prepared for the worst. At the time, Trump was threatening to tax Chinese products up to 60%. This risk had been taken very seriously in Yiwu, a city of almost 2 million inhabitants located in Zhejiang province, two hours by high-speed train from Shanghai. Since the 1980s, it has been home to the largest wholesale market for consumer products in the world, the International Business & Trade City — an actual city within a city.
Each day, 3,900 buyers from all over the world come to this XXL supermarket of 6.4 million square meters, which is divided into several halls and where you can find anything: toys, fake plants, small household appliances, smartphones, electronics… This market alone encapsulates Zhejiang’s export and manufacturing power. In 2024, 17% of Chinese exports to the U.S. came from this province — enough to put it at the forefront of the U.S.-China trade war.
But once he was elected, Trump decided in the end to tax his closest neighbors more harshly, with 25% tariffs for Canada and Mexico. According to the U.S. president, these two countries are more important in his fight against drug trafficking and illegal immigration. With 10%, China initially got off lightly.
A 0.5% impact on Chinese GDP
Still, Beijing immediately retaliated on Feb. 4 by imposing taxes on U.S. coal and liquefied natural gas at 15%, as well as crude oil, agricultural machinery and large cars at 10%. China, which concentrates the production of rare earths, has also restricted the export of these strategic metals to the U.S. and launched an antitrust investigation against Google.
There are more opportunities for Beijing to retaliate as the balance of power has changed since the first trade war under Trump’s first term. Today, not only has China become a supplier of technologies, which gives the country greater retaliation power, but Chinese trade has also become less dependent on the United States.
We don’t work much with the United States but a lot with India, Pakistan and the Middle East.
In 2024, Chinese exports to the U.S. represented only 14% of the total, compared to 21% in 2021. As a consequence, the initial 10% tariffs should only reduce Chinese GDP in 2025 by 0.5%, according to Oxford Economics.
How? Because in recent years, China has continued to diversify its buyers. Developing countries have become its new preferred terrain. This phenomenon is particularly visible in Yiwu. Here, buyers come mainly from the Middle East, Central Asia, Russia or the Indian subcontinent.
Camels and halal dishes
At the entrance to Hall 1, a camel carved out of boxwood amid a flowerbed has been installed, as a nod to Middle Eastern customers. All around, even the restaurants have had to adapt to offer halal or vegetarian dishes. “Are you Kazakh?” asks a saleswoman of kitchen items wearing a pink imitation Chanel suit. She has come to pick up three bowls of noodles at noon for her customers who have arrived from Kazakhstan’s largest city, Almaty.
“We don’t work much with the United States but a lot with India, Pakistan and the Middle East,” says Shi Liu, a trade agent who acts as an intermediary between buyers and suppliers and who helped transport million worth of goods last year. For the past 10 years, Kuldip, a buyer from Bombay, has been coming to Yiwu two to three times a year to buy between to and eight containers of products. “It’s easy to work here, the prices are low and you don’t get ripped off,” says the entrepreneur, in the fake plants section.
Even Zhu Bingbing is managing to sell more and more Christmas decorations in these countries where the Christian holiday is not celebrated. “With the trade war, it’s harder to find new U.S. customers, but every day I have new clients from developing countries,” she says.
