The US’ tariffs on many Asian countries have made China as a safe harbor more attractive to businesses, according to a report from the New York Times. The report, titled “In a Storm of Tariffs, Many Companies See China as the Safest Harbor,” explains why businesses hesitate to make major moves in the face of global trade uncertainty.
“Staying in China and making China work is everyone’s strategy right now,” said Travis Luther, founder of MOSO Pillow. His company, based in Denver, makes bedding from bamboo fiber. Luther emphasized that business owners, like him, aren’t seeking new partners or trying to leave China. Instead, they are working with their Chinese partners to cut costs and create new products. China’s manufacturing and engineering processes remain highly sophisticated, making it a top destination for production.
Companies often prefer staying with established suppliers in China, despite challenges. One international contract manufacturer executive explained that long-term decisions to shift away from China are hard to make due to unpredictable US policies. Many companies prefer to stick with what they know best.
Sarah Massie, a foreign trade consultant, noted that businesses often maintain the status quo when tariffs are high globally. In manufacturing, China as a safe harbor is still the default option for many companies.
Financial analysts also believe in China’s strength. Pictet Group analysts pointed out that China has significant fiscal space to provide stimulus despite high tariffs. They also noted that China’s reliance on US exports is often overstated.
JP Morgan Asset Management and Morgan Stanley both expressed confidence in China’s market stability. They highlighted strong fundamentals and long-term investment opportunities in Chinese assets.
As companies increasingly view China as a safe harbor, many criticize the US’ latest tariffs for adding to global uncertainty.
