Impact of Tariffs on China’s Semiconductor Traders in Huaqiangbei
China’s semiconductor traders in Huaqiangbei face severe business declines due to US-imposed tariffs, leading to drastic order reductions and operational challenges, with uncertainty about future tariffs looming.
China’s semiconductor traders, located in Huaqiangbei, one of the largest electronics markets, have experienced a significant downturn in business due to the impact of tariffs imposed by the United States. The bustling streets mask a stark reality as the chip segment observes drastically reduced foot traffic and orders. A distributor noted, “Orders have plunged since last week,” attributing this to increased prices of CPUs from major manufacturers like Intel and AMD, which have surged between 10 and 40 percent.
The tariffs have placed tremendous strain on the supply chain, especially since an effective cumulative tariff rate on Chinese imports from the US has reached around 156 percent. As part of the ongoing trade tensions, China has responded with levies on US goods that match those of the US, exacerbating the situation for local chip vendors. A distributor expressed desperation, stating, “There’s no point in working right now – we’re not making any money.”
The situation has become so dire that some suppliers have ceased providing quotes or shipping, coinciding with China’s announcement of additional retaliatory measures. Zheng, a chipmaker, noted that the apprehension among customers in Southeast Asia has increased, further complicating business operations. He shared, “Business has been tough in recent years due to market saturation, and Trump is making everything worse.”
In light of these challenges, Zheng has opted to handle packing chips independently, reflecting a significant decrease in orders. Furthermore, the potential for additional tariffs looms over the semiconductor industry following recent developments, including a temporary exemption from tariffs for certain electronic products. As the China Semiconductor Industry Association clarified, chips produced by US firms but manufactured abroad would not face retaliatory tariffs, but uncertainty remains as more details are anticipated from upcoming announcements by US President Trump.
The tariffs imposed during the US-China trade war have substantially affected China’s semiconductor market, leading to a drastic reduction in orders and business operations. Traders in Huaqiangbei, although initially appearing unaffected, are experiencing the harsh realities of these increased duties. Key individuals in the sector express concern over rising costs and a general sense of unease about maintaining operations amid escalating tariffs. The future remains uncertain, with potential additional tariffs threatening further disruption.
Original Source: www.channelnewsasia.com
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