All that cheap Chinese stuff is now Europe's problem

Trump's tariffs have redirected the flow of low-valued packages away from the U.S. into backyard warehouses on the Continent; the 'new Silk Road'

- Chelsey Dulaney & Rebecca Feng

President Trump's crackdown on Chinese imports in the U.S. has redirected a tsunami of cheap stuff into Europe. Some of it is pooled in Xue Er's backyard.

A stay-at-home mom in her 40s who moved from Shanghai to the U.K. in 2021, Xue recently built a 320-square-foot shed to store clothes, bags and small furniture from Chinese merchants, many of whom are eager to broaden beyond the American market. When orders come in she packs and ships the products, cutting the turnaround time. In a good month she earns £3,000 to £5,000.

Her family warehouse is a crucial part of a shadow logistic network that has powered China's trade surplus past $1 trillion for the first time this year. Upstart cargo airlines are forging what they call a modern silk road, connecting factory hubs in China to population centers across Europe, where Chinese immigrants get paid to store goods in spare rooms.

The redirection of China's export machine is one of the most dramatic examples of how President Trump's trade war has rewired global commerce. China is outfoxing Trump's efforts to isolate Beijing, with shipments to Europe and Southeast Asia more than offsetting the nearly 20% contraction to the U.S.

The European Union has this year topped the U.S. as the largest market for China's $100 billion cheap package blitz for the first time, according to Chinese customs data.

"Europe is increasing, increasing, increasing," said Bob Liu, 28, who flew to London in November to promote the plush slippers he manufactures in the southern Fujian province at a trade event.

The U.S. used to be 80% of his business, but has fallen to 50% this year. Europe's share has soared to 40% from less than 2% last year. He's designed a new line to appeal to Europeans, including oversize slippers that can be customized to look like a teal BMW or a red Ferrari.

"Europeans are more friendly to the Chinese now," he said.