Yiwu, a city in China renowned for hosting the world’s largest wholesale market, is feeling the impact of escalating trade tensions, particularly since the onset of President Donald Trump’s trade war. This vibrant marketplace, which supplies a vast array of affordable manufactured goods, has seen a significant decline in American customers, as tariffs imposed on imports have driven many to reconsider their purchasing strategies.
The wholesale market total in Yiwu counts a staggering 75,000 suppliers housed in six huge buildings. These suppliers provide an eclectic range of goods ranging from fine art to toys, tech items, socks, baseball caps and Christmas ornaments. Last year, Yiwu set a new record with a total import and export value of 668.93 billion yuan, or $91 billion. That’s a whopping 18.2% increase from last year! U.S.-bound products have been hit with increased scrutiny and costs from tariffs.
Nicole Zhang and her husband, Huang Fangchao, own Yiwu Dowell Accessories Co. Their specialty is designing innovative accessories for multinational brands. Zhang said between 60-70% of her company’s six million PKG were for the U.S. market. In her written testimony, she was worried about the growing effects of tariffs on her company.
“If I had to pay the tax, I’d be losing money. Our prices are already quite low, so the tax is definitely something the customer has to handle themselves.” – Nicole Zhang
In the same way, Chen Jinsai, a merchant recognized for advertising press-on nails, documented losing more than 90% of his business. He hasn’t sent any products to the U.S. this year. He can’t move forward with all these increasing export taxes hanging over his head.
“The export taxes have gotten way too high.” – Chen Jinsai
While local vendors in Yiwu continue to struggle, international traders such as Vicky Eng remain hopeful about the opportunities that Yiwu has to offer. Eng, as you may have guessed, traveled from Chicago to purchase unique hair clips and accessories she sells through her Black-owned startup Adorro. She was able to take a preemptive approach, but she noted that her U.S. clients have gotten “a lot more gun-shy” since the tariffs were introduced.
Responding to her new pricing strategy due to the additional tariffs, Eng said.
“We haven’t raised prices since the tariffs have been announced because we don’t want to pre-emptively jump the gun with any price increases if it’s not necessary.” – Vicky Eng
She said her company so far has succeeded in offsetting those losses by diversifying its market focus.
“For us, we have ways of offsetting the losses by selling to other markets.” – Vicky Eng
Local suppliers and traders in Yiwu are now navigating an uncertain future as they attempt to adapt to changing market conditions. Lou Jinling, a market analyst in Yiwu, expressed the cautious mood of most traders.
“They want to see what is happening in the future.” – Lou Jinling
The case is symptomatic of larger trends at play in the global trade environment as tariffs upend traditional trade flows and economic realities. Yiwu’s wholesale market is deeply dependent on American customers. This reliance poses serious consequences, particularly given the danger of continued uncertainty.