Tariff de-escalation helps ease threat of mass China layoffs

Yet job market pain persists for factory and other workers as nation faces hikes of 30%, writes Reuters

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Chinese worker Liu Shengzun lost two jobs in just one month as US import tariffs shot up to triple digits in April, forcing a Guangdong lighting products factory, and then a footwear maker, to reduce output.

Tariffs came down dramatically this week, but Mr Liu has given up on factory jobs and is now back farming in his hometown in southern China.

"It's been extremely difficult this year to find steady employment," said the 42-year-old, who used to earn 5,000-6,000 yuan (23,000-27,700 baht) a month as a factory worker and now doesn't have a steady source of income. "I can barely afford food."

The rapid de-escalation in the US-China trade war after the Geneva talks last weekend has helped Beijing avoid a nightmare scenario: mass job losses that could have endangered social stability — what the ruling Communist Party sees as its top-most priority, key to retaining its legitimacy and ultimately power.

But this year's US tariff hikes of 145% left lasting economic damage and even after the Geneva talks remain high enough to continue to hurt the job market and slow Chinese growth, say economists and policy advisers.

"It was a win for China," a policy adviser said of the talks, speaking on condition of anonymity due to the topic's sensitivity. "Factories will be able to restart operations and there will be no mass layoffs, which will help maintain social stability."

But China still faces challenging US tariffs of 30% on top of duties already in place.