Trump’s Trade War Poses Risk to 16 Mn Jobs in China, Manufacturing to Take Max Tariff Toll

US President Donald Trump’s 145% reciprocal tariff on Chinese goods could pose a risk to around 16 million jobs in China, especially in the manufacturing sector, the South China Morning Post reported, citing a Goldman Sachs study. Reportedly, nearly one-quarter of the jobs at risk are related to wholesale and retail business and within these sectors those involved in the production of communication equipment, apparel, and chemical products are more vulnerable due to their dependency on exports to the US markets. 

“If high US-China tariffs were to persist and Chinese exports were to fall precipitously, labour markets would surely feel the pressure,” said the Goldman Sachs analyst in a report published on April 27.

Also Read: Shein Hikes Prices for Products in US as “De Minimis” Exemption May 2 Deadline Approaches

The Goldman Sachs study highlighted that ending of “de minimis” tax exemption by the US President for low-value shipments will directly impact China’s retail and wholesale employment. Chinese e-commerce platforms like Temu and fast fashion giants like Shein, who mainly deal with cheaper products and benefited from the “de minimis” exemption, will now be impacted. 

“President Trump is ending duty-free de minimis treatment for covered goods from the People’s Republic of China (PRC) and Hong Kong starting May 2, 2025,” said the White House in an order on April 2. 

The study by the bank shed light on China’s key coastal provinces, including Guangdong, Jiangsu, Shandong, Zhejiang and Shanghai, which are major facilitators of the US exports and will suffer the most. These coastal regions contribute around 40% to China’s GDP. 

“Recent tariff hikes at their current levels could have a long-lasting impact on China’s regional economies that trade most actively with the US,” said Christopher Yip, credit analyst at S&P, according to Business Standard. 

Chinese government instills faith 

Addressing the challenges posed by the trade war between the two major economies of the world, a deputy governor of the China’s central bank, Zou Lan, said the government will introduce policy to ensure stability. 

“Incremental policies will be introduced in a timely manner to help stabilise employment, enterprises, markets, and expectations,” said Zou, according to the Associated Press.