American retail giants Walmart and Target have resumed placing orders with some of their Chinese suppliers following a temporary halt linked to mounting U.S. tariffs, according to Chinese factory representatives.
The decision to restart business, albeit partially, follows a high-level meeting last week between U.S. President Joe Biden and executives from major U.S. retailers, including Walmart, Target, Lowe’s, and Home Depot. Retail leaders reportedly warned that shelves across the country risk running bare due to ongoing trade restrictions and supply chain disruptions.
Retailers had previously paused or cancelled orders due to the uncertain impact of new U.S. tariffs—reportedly reaching as high as 145%—on goods imported from China. These tariffs have disrupted supply chains critical to U.S. business operations and are placing significant strain on Chinese manufacturers reliant on exports.
Chinese Suppliers See Cautious Return of Orders
A toy factory owner in Anhui province said orders from Walmart resumed last week. “American supermarkets are short on inventory, and we’re closely watching how the tariff situation evolves,” said factory manager Vivi Tong. “Our toy cars are low-margin items. If tariffs fall to around 30%, customers might find the pricing more acceptable.”
Typically, May through October is the peak season for toy production in China, as exporters prepare shipments for the holiday retail surge in the U.S. Tong noted that preliminary orders from clients were delayed during this period of tariff uncertainty, but some activity has now restarted.
A ceramics supplier at a trade fair in Guangzhou confirmed partial order resumptions by Walmart, indicating a cautious but noticeable shift in the trade dynamic.
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Last month, before the dramatic tariff increase, Walmart had reportedly pressured its Chinese suppliers for price reductions—an action that sparked criticism from Beijing and prompted China’s Ministry of Commerce to summon company executives for discussions.
Michael Hart, president of the American Chamber of Commerce in China, acknowledged the situation reflects ongoing efforts by businesses to manage risk in light of the new trade environment. “We’re seeing discussions aimed at getting certain products exempted from tariffs, especially those critical to supply chains or with no viable alternative sources,” he said.
Another supplier, Allen Yan, who produces swimming pool supplies in Zhejiang province, confirmed that he received instructions on Monday to ship a batch of products to Target. That order had previously been suspended for two weeks. However, he noted that business with other major clients such as Costco and Sam’s Club remains on hold.
“If the situation persists, shelves in U.S. stores might be empty in just a couple of months,” Yan warned. Unlike some competitors, he has refused to grant discounts, despite pressure from retailers.
Small Manufacturers Struggle with Uncertainty
The financial strain is spreading across the Chinese manufacturing sector. Rachel Zhang, who operates a textile factory supplying blankets and cushions to major U.S. retailers, including Walmart and Costco, said her orders were suspended in early April. While she has redirected some inventory toward smaller markets in Europe and Japan, the volume is insufficient to cover losses from halted U.S. orders.
“There’s too much uncertainty,” Zhang said. “We don’t know if this will last six months or longer. That kind of delay is unsustainable for small and medium-sized factories like ours.”
While the U.S. tariff policy is causing reverberations across the global supply chain, Chinese officials are working to offset the blow to their domestic economy. At a press conference on Monday, Deputy Minister of Commerce Sheng Qiuping announced plans to boost financial and policy support for exporters.
Sheng outlined efforts to assist manufacturers in managing external risks, encouraging them to shift toward domestic and alternative markets. He added that the government would continue expanding its policy tools to stabilize foreign trade and introduce new measures as needed.
Though some trade has resumed, suppliers and analysts alike agree that the situation remains volatile. The broader impact on employment, inventory levels, and international relations could deepen if trade tensions between the world’s two largest economies persist.
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