Chinese companies are demonstrating resilience amid ongoing United States tariff policies.

This is largely due to limited exposure to the American market and a focus on domestic revenue.

According to Steven Sun, head of research at HSBC Qianhai Securities, overseas revenue constitutes only 10% to 15% of total revenue for companies listed in Shanghai or Shenzhen.

The share of China’s exports to the US has decreased from approximately 20% in 2018 to 14% in 2024.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ The centuries-old cycle of US-China trade tensions

Today’s tariff tensions follow a pattern that’s been repeating since American merchants first sailed to China in 1784 with the Empress of China, which carried ginseng and silver to trade for Chinese tea and silk 1.

Throughout the 19th century, the United States struggled with trade imbalances with China, leading to economic frictions that mirror today’s concerns about trade deficits and market access 2.

The current reduction in China’s export dependence on the US—from 20% in 2018 to approximately 14% today—represents the latest chapter in a relationship that has historically fluctuated between cooperation and conflict 3.

The Treaty of Wangxia in 1844 marked America’s first formal trade agreement with China, establishing a pattern of negotiated resolutions to trade tensions that continues with today’s temporary tariff truces 4.

2️⃣ Supply chain restructuring as a strategic response to tariff risks

Chinese companies have been actively restructuring their supply chains since the 2018 trade war, with firms like Luxshare Precision Industry moving US-bound production out of China 3.

This multi-year adaptation strategy has created more resilient manufacturing networks that can better withstand tariff shocks, as evidenced by companies’ expressed confidence in their ability to manage the impact of new trade barriers 3.

Chinese manufacturers have increasingly diversified their export markets, with DR Corp developing a two-track strategy that separates brand building from retail operations to maintain US market presence despite tariff uncertainties 3.

The current US-China tariff rates—51.1% average US tariff on Chinese goods and 32.6% average Chinese tariff on US goods—have already forced companies to adapt their operations to a high-tariff environment 5.