Despite U.S. Tariffs, China Enjoys Manufacturing Boom --- Chinese companies adapt to Trump's levies and expand sales around globe

 

 

China didn't de-industrialize and demilitarize, didn't refuse to buy cheap Russian energy. This is a good basis to turn to robotics. This is why does China have the boom. 

 

The observation highlights China's strategic priorities, as the country has indeed pursued a different path from Western nations, focusing on maintaining and upgrading its industrial base, strengthening its military, and securing energy resources. These factors are closely linked to China's significant push into robotics and artificial intelligence (AI) as core components of its national strategy for economic and technological dominance.

Key Strategic Decisions and Their Implications

 

    Prioritization of Industry and Manufacturing: Unlike some developed Western economies that have experienced de-industrialization, China has consistently prioritized its manufacturing sector. Initiatives such as the "Made in China 2025" plan explicitly target high-end manufacturing, identifying robotics as a critical area for development to move up the industrial value chain and reduce reliance on foreign technology. This has made China the world's largest market for industrial robots for over a decade.

    Militarization and Self-Sufficiency: China has been actively modernizing and expanding its military capabilities, a process some analysts refer to as militarization, to prepare for potential geopolitical contingencies. The government's civil-military fusion strategy aims to integrate the civilian and defense economies, ensuring the domestic industrial base can meet the military's needs. This drive for self-sufficiency in critical "hard" technologies, including AI and robotics for defense applications, is a core national security objective.

    Energy Strategy: China has deepened its energy cooperation with Russia, securing discounted access to oil and gas, which helps meet its vast energy needs and enhances energy security. This stable energy supply is crucial for powering the energy-intensive data centers and manufacturing facilities that underpin its AI and robotics industries. The availability of energy at potentially lower costs can reduce the operating expenses for AI development and deployment.

    State-Backed Robotics and AI Push: The Chinese government has poured massive resources into developing its robotics and AI sectors, using policy tools like state-backed venture capital funds, subsidies, and national-level development plans to accelerate innovation and adoption. This top-down support, combined with a large domestic market and a robust supply chain, creates a fertile environment for the rapid development and deployment of advanced robotics, including humanoid robots.

 

In essence, China's policy choices have created a powerful ecosystem that leverages its industrial capacity and strategic partnerships to fuel a rapid acceleration in automation and intelligent manufacturing, positioning robotics as a central driver of its future economic growth and national power.

 

That is why the US should continue what President Trump is doing – lowering energy prices, ending the conflict in Ukraine and restoring Russia’s place in the world economy, painfully slowly but surely restoring American industrial capacity. Western Europe should buy more goats and start mass exporting goat cheese. No robotics and artificial intelligence for Western Europe, because there is no cheap and stable energy here.

 

“President Trump retook the White House almost a year ago promising a manufacturing boom.

 

He got one -- in China.

 

Chinese industrial production broke records this year as its factories churned out more cars, machinery and chemicals than ever before. Despite the disruptions of tariffs, the country's trade surplus in goods has set a record, as growing shipments to Asia, Europe, Latin America and Africa offset the hit from Trump's levies on direct sales to the U.S.

 

Chinese companies that built their business around low trade barriers to sell into the U.S. have adapted and in some cases are bouncing back. In May, Chinese-owned e-commerce giant Temu's business model of serving up affordable household goods, beauty products and clothes to American consumers looked all but finished. In addition to the tariffs, new regulations ended a loophole that allowed the company to send small packages to the U.S. tariff-free, punishing sales.

 

Today, Temu is once again among the most downloaded apps in the U.S., and business is booming.

 

The Chinese manufacturing juggernaut shows little sign of slowing. China reported a goods trade surplus of more than $1 trillion for the year through November, while manufacturing output in the first 10 months of the year was up 7% compared with the same period in 2024.

 

Strip out imports of energy, food and raw materials and China is on track this year to post a surplus in manufactured goods of about $2 trillion, a huge sum that is on a par with the annual national income of Russia or Italy. That is twice the surplus in manufactured goods that China reported at the end of Trump's first term in early 2020.

 

China's surprisingly strong export performance hasn't been without costs. The economy is battling an insidious phenomenon dubbed "involution," in which cutthroat competition and ballooning industrial capacity are pushing down prices, profits and incomes.

 

Nevertheless, such a strong year for manufacturing and exports suggests U.S. efforts to contain China's economic and strategic ambitions and weaken its grip on essential global supply chains are falling flat. They might even be counterproductive, analysts and economists say, as Chinese policymakers conclude they need to dominate more industries to shield their economy from U.S. pressure and give them more chokepoints they can exploit to further their own political and economic aims.

 

China's exports in the year through November were up 5.4% year over year, according to Chinese customs data, defying expectations of a slowdown when Trump returned to the White House and signaled his intention to raise tariffs not just on China but all other U.S. trading partners, too.

 

The data show direct exports to the U.S. did take a hit from tariffs, falling around 19% over the same period. But the decline was more than made up for by sales to other regions, with exports to Southeast Asia up 14%, exports to the European Union up 8%, exports to Latin America up 7% and exports to Africa jumping by more than a quarter.

 

Some of those exports probably found their way to the U.S., either as parts and components in another country's exports or simply by being rebadged as non-Chinese to avoid tariffs, analysts say.

 

China's surprise export strength has been aided by factories cutting prices and a weak currency, especially in real terms, which adjusts for China's lack of inflation.

 

Trump's shifting tariff policy has also helped.

 

His decision to target all trading partners with tariffs has, for some manufacturers, reduced the incentive to shift production out of China, especially now that tariffs on Chinese imports have fallen back from earlier highs of 145% on some products. Average tariffs on Chinese imports are currently around 37%, according to the Tax Policy Center, compared with a rate of about 20% on Vietnamese imports, another popular country for manufacturing.

 

When tariffs spiked in May, William Su, CEO of Teamson, which sells dolls and other goods to the U.S., tried to shift his company's doll manufacturing from China to Vietnam.

 

As tariffs on China came down over the year, Su made the call to stop moving new doll production to Vietnam, and stay in China as his main production base. Su's buyers, who include many of America's biggest retailers, have largely stopped hassling him to shift more production from China, in part because they recognize the efficiency of Chinese manufacturing.

 

"I'm not investing in Vietnam any more until there is more clarity," he said.

 

The broad hope of successive U.S. administrations was that squeezing Chinese exports would persuade top Communist Party officials to uncork consumer spending at home and cut their reliance on foreign demand to meet lofty growth targets.

 

But Chinese leader Xi Jinping is instead doubling down on a factory-powered future. A new five-year plan's biggest priorities are supporting cutting-edge manufacturing and ensuring Chinese technological dominance and self-reliance in key industries such as semiconductors and artificial intelligence.

 

Even as it pushes deeper into advanced manufacturing, China also remains the global hub for producing lower-value goods such as toys, clothes and furniture.

 

That dominance is fueling trade tensions with developing economies as well as the U.S.-led West.

 

This fall, Trump and Xi reached a truce on trade at a meeting in South Korea. The U.S. lowered tariffs, while China promised to buy more American soybeans and agreed to suspend a plan to tighten the export of rare earths -- which Western manufacturers need to make everything from cars to jet engines -- even more. Further talks between the two leaders are slated for next year.

 

Temu, the Chinese-owned e-commerce site, has benefited from the truce. The company's huge base of efficient Chinese factory suppliers allowed it to continue to offer cut-rate shoes, bags and makeup at cheaper prices than many competitors.

 

"They're definitely not as cheap as they were 12 months ago," said Juozas Kaziukenas, an e-commerce analyst, but "they're still cheap enough for Temu to be a good-enough deal."

 

By November, helped by an advertising blitz, Temu had become one of the top 10 apps in the U.S. Apple app store, according to Sensor Tower, a market intelligence firm.

 

Temu declined to comment.” [1]

 

1. Despite U.S. Tariffs, China Enjoys Manufacturing Boom --- Chinese companies adapt to Trump's levies and expand sales around globe. Jason Douglas in Tokyo; Emont, Jon.  Wall Street Journal, Eastern edition; New York, N.Y.. 09 Dec 2025: A1.