The world of Chinese style creates a prosperous era for girl groups

The tariff war initiated by the US President is vigorous. Prices in the United States have been rising again and again. There has been a rush to buy supermarket items in many cities. It is said that the price of a box of 18 eggs has risen to US$30, causing gangs in neighboring Mexico to start smuggling eggs.

But it does not seem to have much impact on ordinary Chinese people. They continue to eat and drink as usual and follow gossip happily.

Perhaps some foreign trade and export-oriented companies will experience a period of pain, but the country has also introduced various policies to help companies tide over the difficulties.

For example, local governments actively encourage enterprises to explore emerging markets and cross-border e-commerce platforms; emphasize the integrated development of domestic and foreign trade, and help export companies expand domestic sales channels; rely on the "Belt and Road" to layout new overseas markets and reduce dependence on the US market; the country improves corporate cash flow and economic vitality through policies such as interest rate cuts and old-for-new exchanges.

Xia Haoyang, who is in the entertainment industry, may not have felt the impact of the tariff war on himself, but the Vancouver-based Xia Group and the Vancouver Shipyard felt the cold and biting like a severe winter.

Xia Group conference room in Vancouver.

"Since the beginning of this year, the increase in tariffs has caused the company's orders for the entire product line to be halved to the United States, and revenue has fallen by 40%; the main sports series has seen a 60% drop in profit and revenue compared to the same period last year; the labor cost of women's clothing products has increased by 5%, the order volume has decreased by 50%, the tariff cost has increased by 25%, and the profit has decreased by 20%; the children's clothing series was originally planned to receive orders of 2029 million yuan in the first quarter of 200, but currently only 40 yuan has been received, and due to the sharp drop in domestic orders, profits have dropped by 5-10%. At present, all children's clothing production lines have been suspended."

"Okay, let me emphasize here that in addition to suspending the production line of the children's clothing series, all women's clothing fabrics that have not been cut when they arrive at the factory will be suspended; those that have already been cut can only be made slowly. The quotation and sampling of US orders will be suspended, and the signed contracts will be suspended or cancelled."

The one who spoke was Kuang Yurou.

But after she spoke, everyone else in the conference room turned their attention to Xia Yimeng, the president of Xia Group.

"Why are you all looking at me? What President Kuang said is what I want to say. Do everything according to what President Kuang says. Xiao Zhang, continue reporting." Xia Yimeng said in a normal tone, without any expression on his face.

"Okay, Mr. Xia, well, our foreign trade department originally received some new order projects that could expand the US market, but they have been put on hold for the time being because during the negotiation process with the US customer, a huge conflict arose, mainly over the issue of tariff sharing. The other party has a tough attitude and requires us to bear all the tariffs, which means that all the tariff pressure will be passed on to us. In this case..."

"Impossible, absolutely impossible! Don't bother with such customers in the future. We will never do that even if we have to completely give up the US market. Doing so is equivalent to losing money to gain publicity. It is not worth it at all." Xia Haoqi, the second son of the Xia family and the company's vice president, interrupted the foreign trade manager. "The US has imposed a cumulative tariff of 145% on my country's textiles and clothing. Do you want us to bear it all? Dream on. No Chinese company will bear this cost. Get out of here."

Facing the furious second son of the Xia family, the eldest sister-in-law Kuang Yurou just smiled faintly, while the eldest brother Xia Haogang, who was sitting on the other side, said nothing.

"Ahem, pessimism is spreading in the industry right now. Many companies, like Zhao Min's factory, are dependent on the U.S. market and are subject to tariff fluctuations. They have to relieve pressure by sharing costs and entrepot trade. However, such "stopgap measures" are difficult to sustain, and some companies have even closed down due to loss of orders. At the same time, the cancellation of the tax-free policy for small packages on cross-border e-commerce platforms has further squeezed profit margins, forcing companies to re-examine the core issues of production efficiency and cost control."

The person who was speaking was Xia Yimeng's old partner who had worked together for thirty years. He was also the company's vice president, a member of the board of directors, and a veteran figure who was highly respected by the entire company: Cao Kun. In terms of blood relationship, Cao's grandmother's line was also a member of the Sixteen Families of Kuaiji.

"Lao Cao, after all, our Xia Group is not completely dependent on exports, unlike Lao Zhao and the others. This is the overall environment now. Let's think about what we can do to minimize our losses and get through this difficult time." Xia Yimeng comforted.

"Brother, you have deliberately visited Annan before. I wonder what the local situation is like? Is it suitable for us to invest and build a factory?" Xia Haoqi turned to look at his elder brother.

Because the tariffs imposed by the United States on different countries around the world are not the same, and they are maliciously targeting China. The tariffs imposed on China are the highest among all countries in the world, and some industries are even as high as 245%, including a 145% tariff on the clothing industry.

Relatively speaking, although tariffs were also raised for countries such as Annan, they were only raised by about 10%. Although costs were also increased, it was still acceptable. Therefore, many Chinese companies chose to invest and build factories in foreign countries, and then sell their products to the United States in the name of that country's companies, so as to avoid the problem of high tariffs.

Xia Haogang, who had been keeping quiet, replied softly, "In terms of labor costs, Annan is indeed very suitable. For the same type of processing positions, Chinese workers earn 800 to 1200 US dollars per month, while Vietnamese workers only earn 280 to 350 US dollars per month. In other words, Nannan's comprehensive labor costs are only about 40% of China's. However, the various environmental facilities are very bad. For example, there is a serious shortage of electricity. Several industrial parks I visited have encountered large-scale power outages. In addition, social security is unstable, government bureaucrats are corrupt, and all kinds of messy extortion are too numerous to mention."

"Plus, the United States seems to intend to increase tariffs on Annan again. So due to the uncertainty of the tariff issue and the increase in market risks, I suggest postponing or canceling the plan to build a factory in Annan."

"Mr. Xia's opinion is pertinent. The U.S. president's tariff policy changes every day. Under the current circumstances, I also think that we should adopt a wait-and-see attitude and not blindly rush to expand production scale, introduce new equipment, or transfer investment plans such as building new factories." Vice President Cao nodded.

"What about re-export trade? I heard that some domestic companies producing Christmas tree decorations have moved their shipping locations to the Middle East. Can we do the same?" Xia Haoqi asked again.

"It's not that easy. Some domestic companies try to circumvent tariffs through entrepot trade, but the actual operation is fraught with difficulties. Entrepot trade involves complex logistics, customs declaration and other processes, which not only increases the operating costs and management difficulties of companies, but also the United States has strengthened its supervision of entrepot trade. Once companies operate improperly, they may face the risk of anti-circumvention investigations and may lose everything under the US legal system."

Xia Haogang shook his head and rejected his second brother's opinion again.