Chinese workers are still feeling the effects of US import tariffs, despite a recent reduction following trade talks in Geneva.

The tariffs, which peaked at triple-digit levels in April, have led to job losses in labor-intensive industries such as furniture and toys.

Liu Shengzun, a 42-year-old former factory worker from Guangdong, lost two jobs last month due to reduced output at a lighting products factory and a footwear manufacturer.

Now back to farming in his hometown, Liu struggles to find stable employment and afford basic necessities.

Policy advisers indicate that the easing of tariffs has reduced the immediate risk of mass layoffs.  However, economists warn that high tariff levels continue to impact China’s economic growth.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Trade wars create asymmetrical employment impacts across countries

The scale of job displacement from US-China trade tensions varies dramatically between the two economies, revealing how tariffs affect labor markets differently based on economic structure.

While Moody’s Analytics estimated the US lost approximately 300,000 jobs due to earlier rounds of the trade war in 2019 1, recent high tariffs put between 4-6 million Chinese jobs at risk according to economist Alicia Garcia-Herrero 2.

This stark difference reflects China’s greater reliance on export manufacturing and labor-intensive industries like furniture, toys, and footwear mentioned in the original article.

The recent de-escalation has provided some relief, with estimates suggesting Chinese jobs at risk have fallen to “less than 1 million” according to Soochow Securities 2, but the structural vulnerability remains.

Historical patterns suggest these employment impacts persist long after policy changes. For instance, the implementation of permanent normal trade relations with China in 2000 correlated with a 30% decline in U.S. manufacturing job growth from 2001-2007 3.

2️⃣ Trade uncertainty permanently alters supply chains and worker behavior

The original article’s profiles of workers like Liu Shengzun and Li Qiang highlight how even temporary tariff spikes can trigger lasting changes to supply chains and labor markets that won’t quickly reverse.

Despite the recent de-escalation, many companies have already accelerated manufacturing relocations out of China to countries like Vietnam and India, representing a structural shift in global trade flows 4.