China weathers tariffs, strain grows
- The BBC reported China has largely weathered past U.S. tariffs but now faces export pressure from the Iran war. - The conflict is hurting factory orders, raising costs, and threatening jobs in export sectors. - That dynamic ties geopolitical instability to concrete trade and employment effects in China (bbc.com).
China’s factories absorbed years of U.S. tariffs, but the Iran war is now hitting orders, freight costs and hiring in export hubs. (bbc.com) At the Canton Fair in Guangzhou on April 17, exporters told Reuters that overseas buyers were delaying orders as energy and shipping costs climbed after the war began. One plastics manufacturer, Shao Haixia, said raw-material costs at her factory had jumped 20%. (reuters.com) China’s export growth slowed to 2.5% in March from a year earlier, down sharply from the first two months of 2026, as the conflict pushed up oil prices and clouded demand. Imports rose faster, narrowing some of the trade cushion that had helped offset tariff pressure. (apnews.com) That shift lands after a quarter in which China still posted 5.0% gross domestic product growth, supported in part by strong exports and industrial output. The National Bureau of Statistics said first-quarter industrial output rose 6.1% from a year earlier. (stats.gov.cn) The pressure is spreading through the parts of the economy that employ millions of workers making goods for foreign markets. China’s urban jobless rate for 16-to-24-year-olds, excluding students, rose to 16.9% in March from 16.1% in February, according to official data released April 21. (reuters.com) China had already spent years adapting to tariffs first imposed in 2018 and expanded again in 2025, with firms rerouting supply chains, cutting margins and chasing buyers outside the United States. Congress’s research service said U.S. and Chinese officials were still in talks in 2026 and had not reached a tariff deal. (congress.gov) The new problem is less about customs duties than about the cost of moving goods and powering factories. Reuters reported that China entered 2026 on an export surge, then ran into higher energy prices and weaker global demand once the Iran conflict disrupted trade and transport. (reuters.com) Trade data also show the regional shock more directly. The South China Morning Post reported on April 20 that China’s trade with Iran and Gulf states fell sharply in March as tighter restrictions around the Strait of Hormuz disrupted energy flows. (scmp.com) Beijing still has room to cushion the blow with stimulus and state-backed lending, and first-quarter growth bought policymakers time. But exporters at the Canton Fair said they cannot keep swallowing higher costs forever, which turns a distant war into a jobs problem at home. (reuters.com)
