China's small workshops are hurting, but tariffs are only one reason

It was 36 deg C in the shade with high humidity and not a breath of wind on the afternoon of July 29 in a factory district in Guangzhou, the home base of China's garment manufacturing.

- Keith Bradsher

GUANGZHOU - It was 36 deg C in the shade with high humidity and not a breath of wind on the afternoon of July 29 in a factory district in Guangzhou, the home base of China's garment manufacturing.

The sewing workshops that were operating in one neighbourhood were sweltering. But roughly half of the hundreds of factories were dark, with their doors closed and no sign of their usual bustle. Around the area, bright red signs on walls and poles indicated industrial buildings were available for sale or rent.

After exchanging escalating tariffs and export restrictions in the spring, China and the Trump administration moved closer last week to another ceasefire to continue to negotiate over their myriad conflicts. But the new status quo has left high barriers between China's exporters and some of their biggest markets in the United States.

Guangdong province, in southeastern China, and its capital, Guangzhou, have borne the brunt of President Donald Trump's tariffs.

China's coastal export sector has been hit twice. It is paying tariffs of 30 per cent or more on shipments to the US - extraordinarily high by historical measures - on top of previous tariffs. And exporters to the US no longer enjoy duty-free treatment for packages worth US$800 (S$1,030) or less.

In Guangzhou, thousands of small factories near the Pearl River used to supply the cheap clothing that e-commerce giants such as Shein and Temu shipped to American homes. Streets in the city's factory districts are less crowded, while managers and workers complain that many orders have evaporated.