"Chinese Manufacturers Establish Factories in Africa to Avoid U.S. Tariffs"

SCMP reports,
"Chinese exporters seek new markets
and expand their reach worldwide"

Chinese manufacturers are expanding their sales channels beyond Southeast Asia, a major alternative export route, to Africa in order to avoid the "tariff bomb" imposed by the Donald Trump administration in the United States.

The containers piled up at Guangzhou Port, China, on the 17th of last month (local time). Photo by AP

On May 7 (local time), the South China Morning Post (SCMP) reported, "Chinese exporters are seeking new detours to continue selling goods to American customers despite tariffs," introducing the case of Beifa Group, a pen manufacturer from Zhejiang Province, which decided to establish a new factory in Egypt.

Beifa Group, which used to earn 40% of its revenue from exports to the United States, suffered a significant blow last month when the Trump administration's second term imposed high tariffs on Chinese products. In response, Beifa Group began searching for a new production base. The company already has a factory in Vietnam, where tariffs have been suspended for 90 days, so for now, it is shipping orders to the U.S. through this facility. However, the company determined that a more long-term solution was necessary.

Zhu Zhiming, the founder and chairman of the company, visited several countries after the United States announced reciprocal tariffs to find a suitable location for a new production base, ultimately selecting Egypt as the final candidate. North African countries, including Egypt, run trade deficits with the United States, so the reciprocal tariff rate has been set at the lowest level of 10%.

Zhu Bojing, vice chairman of Beifa Group and son of Chairman Zhu, said in an interview with SCMP, "Since Egypt has a trade deficit with the United States, it should be safe from President Trump's additional tariffs." He also added that establishing a factory in Egypt would make it easier to expand into Europe.

Beifa Group is also considering entering the U.S. market directly. Vice Chairman Zhu stated that he plans to meet with American partners later this month to discuss the feasibility of building a factory in the United States.

SCMP reported that there are signs the worst may be over, such as Walmart, a U.S. retailer, notifying some Chinese suppliers in Zhejiang Province and other regions at the end of last month to resume deliveries. However, export companies including Beifa Group are still being heavily affected by tariffs.

Vice Chairman Zhu said that the Chinese authorities have been preparing emergency measures since early last month to mitigate the impact of U.S. tariffs. However, he noted that some employees may still be laid off and stated, "The government must be prepared for a certain amount of job losses."