Hundreds of angry Chinese workers are marching in the streets of China’s industrial cities to protest layoffs and unpaid wages after President Donald Trump’s tariffs forced their factories to shut down.
Unemployment was already a big problem for China’s faltering post-pandemic economy, particularly youth unemployment, and now analysts are predicting Trump’s tariffs could wipe out more than 16 million jobs.
Radio Free Asia (RFA) on Tuesday quoted Goldman Sachs analysts who predicted communications, apparel, and chemical manufacturers would be especially hard hit. One of the biggest strikes and protest marches occurred last week at a factory that produces sporting goods. A company representative hastily hung up the phone when RFA called to ask about the current status of the labor dispute.
Many of the protesting workers have grievances that predate even Trump’s first round of tariffs in February. Unpaid back wages are a frequent complaint, often stretching back into 2024. Workers at a circuit board manufacturer in Sichuan said they have not received social security benefits since 2023. A group of construction workers in Inner Mongolia threatened last week to jump off the roofs of the buildings they have been constructing if their back wages were not paid.
Thousands of workers at China’s electric vehicle (EV) giant BYD walked off the job in March and April, angered by pay cuts and poor working conditions. The protesters said BYD reneged on promises made to its employees during corporate expansion.
Ji Feng, a survivor of the 1989 Tiananmen Square protest, told RFA that Chinese businesses were in much worse shape than the regime in Beijing was willing to admit, so the blow of Trump’s tariffs struck much harder than it predicted.
Ji said conditions have grown steadily worse since the Wuhan coronavirus pandemic, which forced many businesses into a doom spiral of delaying payroll for as long as possible, then borrowing money to pay back wages once the fury of workers could no longer be contained.
“Some bosses even said that they would rather go to jail than do anything,” Ji said, alluding to the Chinese government’s threats to arrest employers who fail to pay wages for more than three months.
Chinese factory activity is currently experiencing its worst slump since December 2023. Cargo shipments are down by up to 60 percent, while new export orders in April fell to their lowest levels since the pandemic.
Those estimates are all based on official government data, and since the Chinese government has a long history of fudging its numbers, the true situation is probably much worse. Capital Economics suggested on Tuesday that Beijing’s numbers for the first quarter were overly optimistic, for example.
China was already experiencing terminally low levels of consumer confidence before the tariffs struck, so there is no great domestic market standing by to absorb the goods America is not importing. Other countries do not seem eager to sacrifice their own domestic industries to soak up a tidal wave of Chinese overstock at bargain-basement prices. Beijing’s attempts to defibrillate the morbid economy with stimulus shock paddles during the last months of the Biden administration were considered disappointing by investors.
The next blow from the tariff war will hit China on Friday, when a new 120-percent levy hits packages that fall under the “de minimis” limit of $800 in value. Huge Chinese companies like Shein and Temu built their entire business model around taking orders via the Internet and shipping small parcels of cheap goods directly to American customers. Shoppers are discovering that tariff surcharges can more than double the prices from these Chinese outlets. Based on anecdotal reports, Temu seems determined to tell its customers exactly how much Trump’s tariffs are costing them, while Shein is struggling to absorb the costs as quietly as it can.
American businesses are taking damage from the trade war as well – but that could become another problem for China because those weak export orders are not going to perk up until American importers feel confident in placing big bets on Chinese manufacturing again. The harder China’s retaliatory tariffs hit American companies, the longer it will be before China’s ports begin humming with activity again.
Chinese dictator Xi Jinping and his top officials remain defiant, but on Wednesday Xi hinted that major policy changes could be coming to handle tariff damage. He did not say exactly what his government planned to do, besides creating more propaganda to accuse the United States of being a bully.
During Wednesday’s opening session of China’s rubber-stamp legislature, the National People’s Congress (NPC), Premier Li Qiang pledged to achieve 5% GDP growth and create millions of new jobs despite the Trump tariffs. China’s increasingly agitated workers will not be pleased if their government fails to deliver on those extravagant promises.
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