Just hours after President-elect Donald Trump won the 2024 election, China began bracing for what could be an unpredictable and rough four years for its economy.
While campaigning, Trump threatened to impose heavier tariffs and pressure Beijing. The incoming president previously said he would increase tariffs on China as high as 60 to 100 percent, which would devastate the country’s economic growth and stress global supply chains. It would also raise prices for consumers because of a trickle-down effect.
Less than 48 hours after Trump’s sweeping win, companies manufacturing goods in China began to withdraw production from the country.
Steve Madden, a popular shoe company, announced it would pull its production facility out of China and move it elsewhere as the potential rise in tariffs loom. CEO Edward Rosenfeld said that the plan has already been put into motion. Instead, Rosenfeld said he would focus on production in Brazil, Mexico, Vietnam, and Cambodia.
S&P Global Ratings said if Trump imposed a 60 percent tariff on China, it "would be inflationary in the short term” but result in "consumers paying more for finished goods.”
“You should expect to see the percentage of goods that we source from China to begin to come down more rapidly going forward,” Rosenfeld added. “Just under half of our current business would be potentially subject to tariffs on Chinese imports.”
Steve Madden currently sources more than 70 percent of its goods from China. However, the CEO said that in the next year, the company aims to reduce this percentage by up to 45 percent.
During his first term, Trump imposed tariffs on China of only ten to 15 percent for certain products.
Chinese leader Xi Jinping congratulated Trump on his historic win and said that China and the United States will “find the right way” to “get along in the new era.”
However, CNN reported that Beijing was worried about uncertainties under a Trump presidency.
In addition, Trump said that his tariff plan would be used to impose a 200 percent tax on vehicles from Mexico.