The Trade War Shift: Why Chinese Exporters No Longer Rely on America

 The sound of buzzing toys fills the air as Huo Tiancheng speaks, his voice nearly drowned out by the commotion. His toy store, Xiaocheng Toys, is nestled in the sprawling wholesale market of Yiwu, a city in China’s Zhejiang province. A toy fighter jet flies overhead as he declares, “We don’t worry about selling our products only to the United States.” The message is clear—his business, like many others in Yiwu, is not solely dependent on American buyers anymore.

Yiwu is not just any city—it sits at the heart of one of the world’s largest wholesale markets, hosting over 750,000 stalls. Each section is vast enough to rival an airport hangar, and buyers from all over the world wander through it daily, searching for everything from Christmas lights to massage devices. Zhejiang, the province where Yiwu is located, is a major export hub for China, with over 30 ports and a substantial share—17 percent—of Chinese exports to the US last year flowing through it. But as trade tensions escalate, Yiwu has emerged as a focal point of the ongoing trade battle between the United States and China.

Toy exports are a big deal in this region. In 2024, China exported $34 billion worth of toys, with nearly $10 billion going to the US. But recent US tariffs, as high as 245%, have disrupted this trade. President Donald Trump has made it clear he wants to challenge China’s dominance in the global economy. This latest wave of tariffs, however, has triggered a different response than in 2018 when the first trade war began. Businesses in Yiwu learned to look elsewhere. Huo sums it up with a shrug and a smile: “Other countries have money too!”

Across China, Trump’s aggressive stance has sparked a wave of patriotic sentiment and state-sponsored messaging. Propaganda emphasizes Chinese resilience and innovation while casting doubt on America’s intentions. Social media platforms, heavily monitored and curated, have been flooded with posts celebrating China’s diplomatic prowess and economic strength. In Yiwu, traders like Dra Hu show little concern. Once dependent on the American market for up to 30 percent of sales, he now says that most of his business comes from South America and the Middle East. “We don’t care about that 20 or 30 percent,” he says confidently. “We’re rich.”

His colleague Chen Leng laughs at the situation, calling Trump’s trade policies “international jokes.” Their sentiment reflects a broader mood among Chinese exporters: annoyance, but not panic. Nearby, a buyer from Dubai negotiates the price of hundreds of toy cars that transform into robots. Chalked numbers on the floor seal the deal—another transaction with no ties to the US. According to Lin Xiaoping, a long-time shopkeeper, the market has shifted dramatically over the past decade. He tells the story of a neighbor who canceled a large American order because of the new tariffs, then casually adds, “They need China. Most of the toys in the US come from here.”

Back in the United States, the pressure is building on small businesses. Toy entrepreneur Jonathan Cathy, who launched his company in 2009 from a modest apartment in Los Angeles, says the tariffs could devastate his business. “It’s hurting small businesses all over America,” he explains over the phone. His company is now worth millions, but he fears the disruption will shatter the supply chain. “It’s not easy to find new suppliers. Chinese manufacturers have decades of experience,” he adds, underscoring just how entrenched the relationship is between American companies and Chinese factories.

Meanwhile, Chinese analysts and military officials are watching closely. Zhao Bo, a former colonel, describes Trump’s approach as a global crusade aimed primarily at weakening China. Trump has accused China of expanding its influence too far, even going so far as to challenge its involvement in the Panama Canal and its ambitions in the Arctic. He’s floated ideas about halving tariffs and negotiating a “great deal” with China. But Beijing isn’t biting. The Ministry of Commerce dismissed the claims, and Chinese media fired back, calling Trump the worst president in US history. As Colonel Zhou puts it, “Let the bullet sit in the air for a while.” He believes the tariffs won’t last long, possibly three months at most, because they are hurting both sides.

Indeed, China is facing its own economic headwinds. Growth is slowing, consumer spending is weak, and the real estate market is shaky. Goldman Sachs forecasts a 4.5% growth rate for the year—short of the government’s goal. The BBC recently visited Guangzhou and reported that exports to the US had all but halted. Factories are full of unsold stock, and suppliers are uncertain about when, or if, shipments will resume. Some say limited orders are trickling in again, but the situation is fragile and inconsistent.

The truth is, the global supply chain is deeply complex. Individual businesses make their own choices, and some will hold out hope while others move on. But American buyers are already feeling the effects. Higher prices and product shortages loom, especially in sectors dominated by Chinese goods—electronics, toys, furniture, even clothing. Large US retailers like Walmart and Target have warned the White House about the consequences. Empty shelves and expensive alternatives could become a reality, especially during the critical holiday season.

In Yiwu, where most of the world’s Christmas decorations are made, traders are turning their attention elsewhere. Before the shops open each morning, corridors echo with new sounds—language lessons. Women gather to learn Arabic, repeating phrases like “Shukra” and “Affa,” part of a free training program by the local government. These women, many of whom run shops or manage sales, are learning the languages of their new customers. As one Iranian shopkeeper who teaches Arabic privately puts it, “These women are the backbone of trade in China.”

Spanish and Arabic have joined English as essential tools for communication in the market. These small adaptations represent a much larger transformation. Colombia’s Oscar walks through the market with bags of stuffed animals, praising the trade war for giving traders like him a competitive edge. He says doing business with China is now more rewarding than ever, while working with the US feels increasingly difficult.

What’s unfolding in Yiwu is not just a reaction to tariffs—it’s a reinvention. In adapting to new realities, China’s traders are discovering that the global market extends far beyond the reach of any single country, even one as powerful as the United States.