For the past five years, Liu Miao has been selling clothing on Amazon to wholesale buyers in the United States. That business has now come to a sudden halt.
Liu runs a modest-sized factory in Guangzhou, a longstanding hub of China’s fiercely competitive garment sector. He and other factory owners report that rising tariffs combined with new U.S. taxes on inexpensive imports have severely squeezed their already narrow profit margins. Additionally, supply chain expenses have surged.
The increased tariffs have made it unfeasible for Liu to continue selling on Amazon, where his profit per garment has dropped from about one dollar to just fifty cents. Liu also expressed reluctance to reduce workers’ wages, even as laborers crowded past his motorbike parked on the sidewalk, draped with a dress sample.
“Right now, selling to the United States is not viable,” Liu explained. “The tariffs are simply too steep.”
E-commerce platforms such as Amazon, Shein, and Temu have connected China’s extensive manufacturing network directly to global consumers. These digital marketplaces enabled thousands of small factories in Guangzhou to reach American shoppers. Moreover, shipments valued under $800 entered the U.S. without tariffs, allowing factories and platforms to offer highly competitive prices.
Exports have been a significant engine for China’s recent economic expansion, with e-commerce playing a particularly prominent role. In one Guangzhou neighborhood, luxury foreign cars like Mercedes-Benz, BMW, and Cadillac were parked outside factories where workers earn roughly $60 a day producing garments sold through apps like Shein and Amazon.
However, escalating trade tensions between the world’s two largest economies have brought many businesses in Guangzhou to a pivotal moment.
