In May 2025, the US and China struck a 90-day tariff truce that surprised most observers in its scale. US tariffs on Chinese goods were reduced from a peak of around 145% to approximately 30%. China reduced its retaliatory tariffs on US goods from 125% to 10%. The announcement sent freight rates, factory order books, and sourcing strategies into another round of rapid recalibration.
A year on, the picture has settled — not back to where it was in 2023, but into a new normal that every buyer sourcing from China needs to understand.
What the Tariff Truce Actually Did
The May 2025 agreement did not eliminate tariffs on Chinese goods. US tariffs on China still sit at elevated levels compared to pre-2018 — the 30% figure includes layers of Section 301 tariffs that have been in place since the first Trump administration, now supplemented by newer reciprocal tariff structures. But the reduction from 145% was dramatic enough to meaningfully change the economics for many product categories.
Where things stand in 2026: US tariffs on most Chinese goods remain in the 30–35% range, well above the pre-trade-war baseline of around 3–5%, but substantially lower than the 2025 peak. Buyers who had diversified away from China during the 145% period are now re-evaluating whether the China cost advantage — even with tariffs — has reasserted itself for their categories. (Source: China Briefing)
The End of De Minimis for Chinese Goods
A change that received less headline coverage than the tariff truce but has had significant practical impact: the removal of the de minimis exemption for goods from China and Hong Kong. Previously, packages valued under $800 could enter the US duty-free without formal customs entry. That exemption was eliminated in early 2025 for Chinese-origin goods.
The impact has been most felt in the direct-to-consumer e-commerce space, where platforms like Temu and Shein relied heavily on de minimis to offer low-cost goods shipped directly from Chinese warehouses to American consumers. For B2B importers who ship via proper freight channels, the practical change is smaller — but it has shifted competitive dynamics in certain retail categories.
If you sell through any channel that competes with direct-from-China e-commerce (Amazon, your own store, wholesale), the de minimis change has reduced one category of low-cost Chinese competition you were facing. That's a small but real benefit for established importers.
Shenzhen — the tech and manufacturing capital of the Pearl River Delta — has adapted fast to the new trade landscape of 2026.
How Chinese Factories Have Adapted
The factories that have come through the 2025 tariff cycle in the best shape are those that didn't wait for the political situation to stabilise — they acted. The consistent pattern we've seen on the ground in Guangdong:
- Diversification of customer base: Manufacturers who were 60–70% dependent on US orders in 2023 are now at 30–40% US, with the balance split across EU, Australia, Middle East, and Southeast Asian buyers. This makes them more resilient — and more motivated to compete for non-US accounts.
- Investment in compliance infrastructure: The October 2025 export compliance overhaul pushed factories to formalise their export registration and documentation. The factories that managed this transition smoothly have cleaner paper trails and, consequently, fewer customs headaches for their overseas buyers.
- Product mix upgrades: Factories in the Pearl River Delta have been pushing up the value chain — investing in automation, adding design capability, and moving into higher-margin product lines where tariff sensitivity is lower relative to the underlying product value.
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Chat on WhatsApp →The Spring Canton Fair 2026: What It Told Us
The 139th Canton Fair (Spring 2026), held in Guangzhou in April, continued the trajectory of the 138th. The technology halls — robotics, AI-integrated devices, new energy products — remained the most congested. Traditional consumer goods categories (furniture, garments, general hardware) were well-attended but less buzzy.
The composition of buyers at the Spring 2026 fair also reflected the new trade landscape. European and Middle Eastern buyers were well-represented. American buyer attendance, while still present, remained below pre-2018 levels — some US companies are still cautious, others have restructured their sourcing around dual-country strategies and aren't buying as much direct-from-China as they once did.
For buyers outside the US: the fair confirmed that Chinese manufacturers are actively seeking to fill their order books with non-US business. Pricing, sample lead times, and minimum order quantities have all become more negotiable than they were during the 2021–2022 boom years.
What Buyers Should Do Now
If you're a US importer
- Recalculate your landed costs at the new tariff levels. At 30–35%, many product categories that were unviable at 145% are viable again — but the margin compression compared to pre-tariff pricing is real. Model it product by product rather than making blanket assumptions.
- Don't abandon the diversification you built. Having a secondary source in Vietnam, India, or Mexico is a hedge worth keeping even if China is competitive again today. The tariff landscape can change again.
- Verify your supplier's compliance status. The October 2025 Chinese export regulations mean your supplier should now be exporting under their own registration, not through an informal trading company arrangement. Ask directly.
If you're sourcing for non-US markets
- This is genuinely a good moment to be buying from China. Factory capacity, flexibility on terms, and supplier motivation are all in your favour. The manufacturers that spent 2023–2025 scrambling to replace US orders want to lock in stable non-US relationships.
- Pay attention to the October 2025 export compliance changes. Documentation now needs to reflect the actual manufacturer, not a trading company intermediary. Ask your suppliers to confirm their export documentation is compliant — it affects your import records too.
- Consider going direct to manufacturer. The trading company layer that many buyers relied on has been squeezed by the compliance changes. Going direct — especially with a local agent to manage the relationship — gives you better pricing, better traceability, and less exposure to documentation issues.
Our View from Dongguan — May 2026
A year ago, the atmosphere in Chinese manufacturing hubs was tense. The 145% tariff spike had created genuine uncertainty about the future of China-to-US trade, and factories were scrambling. Today it's calmer — not back to normal exactly, but stabilised into something workable.
The factories that made it through are leaner, better diversified, and frankly more professional than many of them were five years ago. The compliance pressures, the quality demands from non-US buyers, and the need to compete across multiple markets simultaneously have raised the bar. That's good for overseas buyers who take the time to find the right manufacturing partners rather than just chasing the lowest quoted price.
Sourcing from China in 2026?
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