What specific impacts will Trump's announcement of imposing a 10% tariff on China have on the domestic export and industrial chains?
Recently, many researchers have made judgments on the industry situation. Overall, promoting the return of industrial chains through tariffs is the core of the United States' future trade policy, and achieving this goal is not easy. Domestic micro entities are also prepared.
Luo Zhiheng, Chief Economist and Dean of the Research Institute at Yuekai Securities, stated that the imposition of tariffs by the United States on China is the biggest external shock and risk that the Chinese economy will face in the coming years. It is necessary to carefully assess the situation and respond in a timely and appropriate manner. The situation is estimated to be more severe, and reserve strategies can be more sufficient.
New Energy Industry: Embracing Greater Uncertainty
The Global Zero Carbon Research Center believes that with Trump's return, Biden's green legacy may be completely cleaned up, which could have a significant impact on the US clean energy industry and bring greater uncertainty to China's new energy industry.
In the "tariff stick" wielded by the United States against China's new energy, the "new three types" of Chinese exports are all on the product list. Specifically, among the "new three types", China's exports of lithium-ion batteries to the United States account for a relatively high proportion and are expected to be affected to some extent; However, the proportion of direct exports of solar cells and electric manned vehicles is very low, and they are not significantly affected by US trade sanctions on the surface.
For photovoltaics, the ongoing anti-dumping and countervailing investigations targeting Southeast Asia have a greater impact compared to the already implemented 201 and 301 tariffs. The initial ruling tax rate for anti subsidy measures is relatively low (as previously expected), and the preliminary ruling result for anti-dumping measures is expected to be announced by the end of November (with tax rates expected to be between 70% and 270%), which will have a significant impact on Southeast Asian exports to the United States.
At present, the US photovoltaic and energy storage supply chains are highly dependent on China, and the impact of the Inflation Reduction Act (IRA) subsidies is greater than the imposition of tariffs. If Trump takes office and cancels the Inflation Reduction Act, the ITC (Investment Tax Credit) subsidy for photovoltaic power plants may face the risk of cancellation, thereby affecting end demand. Currently, the ITC subsidy amount accounts for 30% -70% of the initial investment in the power plant, and is refunded annually according to the tax credit during the operation period.
At the same time, the current domestic photovoltaic production capacity in the United States is mainly based on modules. Several photovoltaic companies that have gone abroad have obtained IRA tax credits. If the subsidies are cancelled, it will affect the profitability of local factories in the United States, thereby affecting local production capacity. In addition, if the IRA is cancelled, it will have a significant impact on the energy storage demand of US end-users, as well as the manufacturing capacity of domestic batteries, battery components, and other related products.
However, according to the Global Zero Carbon Research Center, even if Trump takes office, it may not be an easy task to completely cancel the green energy subsidy policy. Any amendment to the law by the President actually requires approval from the US Congress, and some Republican lawmakers have expressed support for retaining the Inflation Reduction Act or parts of it.
Black industry: domestic demand cycle is expected to bottom out
Black analysts at Yide Futures believe that the biggest risk for black industries (such as ore, coking coal, coke, thermal coal, rebar, etc.) during Trump's current term undoubtedly comes from tariff increases. However, after this difficult winter, there is no need to be too pessimistic about the market after the second half of 2025.
Unlike the previous Trump administration, there are already expectations of a bottoming out of the domestic demand cycle. If loose policies can drive construction demand to gradually stabilize and rebound, and the manufacturing industry can maintain resilience, even if exports decline to some extent, the overall demand growth rate will not easily decline significantly again. Instead, there are expectations of stabilizing and bottoming out. For black industries, after this difficult winter, there is no need to be too pessimistic about the market after the second half of 2025.
Polyester industry chain: early replenishment of inventory or significant improvement in short-term export orders
The Dadi Futures Research Institute believes that for the polyester industry chain, the focus of the market is on the cost side when Trump wins the election, that is, the potential negative impact of Trump's support for traditional energy on the upstream raw material of polyester - oil. However, the Trump administration has expectations of tightening sanctions on Iran and Venezuela, which will benefit oil prices. The key to determining the direction of oil prices lies in the pace of US policy implementation.
On the other hand, the market will also pay attention to the impact of changes in US trade policies on the import and export markets of different polyester chain products. China's PX, PTA, filament, short fiber, and bottle chip markets have almost no trade relations with the United States, and the possibility of being directly impacted by the new US government's trade policies is relatively small. The impact of US trade policies on the polyester industry chain is mainly reflected in ethylene glycol and terminal textiles and clothing.
The Dadi Futures Research Institute predicts that Chinese and American companies or individuals may engage in export or import competition before the new US government introduces policies, replenishing inventory in advance and causing a significant improvement in short-term domestic polyester industry chain export orders. In the medium term, with the inauguration of the new US government and the implementation of trade policies, China's imports of ethylene glycol experienced a phased decline and exports of textiles and clothing were suppressed. However, in the long run, with the restart of idle domestic ethylene glycol production capacity and the restructuring of the textile and clothing supply chain, the impact of the new US government's trade policies on the polyester industry chain is gradually weakening.
TV industry chain: The pace of overseas transfer of TV production capacity continues
According to research firm Ovrievo, in the Trump 2.0 era, whether it is imposing a 60% tariff on imported goods from China or canceling China's most favored nation treatment, it may accelerate the pace of overseas transfer of TV production capacity.
Since the last round of the China US trade dispute, the tariffs on mainland TV exports to the United States have undergone multiple changes, stabilizing at 11.4% in recent years, but still far higher than other countries' import tariffs of 3.9%. Under high tariff barriers, the scale of Chinese TV exports to the United States has also decreased from 31 million in 2018 to 12.6 million in 2023, and the proportion of US TV imports from China has shrunk from a peak of 61% to below 20%.
Since the trade dispute between China and the United States, TV brand manufacturers and contract manufacturers have been increasing their overseas production capacity through new factories, cooperative factories, and expanding existing factories. Since 2018, the annual production capacity of overseas TVs has increased by a total of 47 million. Southeast Asia and Mexico have become the regions that benefit the most from the overseas transfer of Chinese TV manufacturing capacity due to manufacturing costs and tariff advantages, with new production capacity reaching 39 million.
AVCRvo predicts that by 2024, Samsung Electronics, TCL, Hisense, and LGE will have a nearly 60% share of shipments in North America, mainly relying on their own factories to supply the North American market. According to the Global TV OEM Monthly Shipment Data Report, in the first three quarters of 2024, 26% of orders in the global TV OEM market came from the North American market. However, some OEM factories currently have insufficient overseas production capacity to support North American customer demand and need to rely on domestic factory collaboration for shipment. Under the risk of Trump 2.0 tariffs, OEM factories are expected to face the choice of order transfer or expanding overseas production capacity, and the structure of North American channel brands and local brand OEM factories may face adjustments.
Pharmaceutical industry: business proportion is not high, limited impact
Recently, many investors have been concerned about the impact of Trump's inauguration on the Chinese pharmaceutical sector. UBS Securities analysts stated at the "Outlook 2025- Global Trends in Innovative Drugs and CRO Industry Chain" meeting held on the afternoon of the 26th that the company has sorted out various sub sectors of Chinese pharmaceuticals and found that in the last round of trade disputes, due to the United States' special targeting of Chinese medical equipment, Chinese equipment companies currently account for less than 10% of US revenue, and some medical equipment companies have potentially offset the impact of tariffs by building factories in the United States. Overall, the impact of imposing tariffs on medical equipment companies is not significant.
For CRO companies, they are service providers and are generally not subject to tariffs.
For finished pharmaceutical and raw material companies involved in exports, as they are related to the public health of the United States, it is expected that these companies will not be targeted. In addition, the proportion of these companies' business in the United States is relatively limited.
UBS Securities analysts also pointed out that in order to hedge against the Trump administration's tariff policies, the Chinese government may introduce greater stimulus policies, bringing strong rebound to some domestic demand oriented and consumer oriented sub sectors, such as specialized hospitals such as dental hospitals and ophthalmic hospitals, which may benefit.