Trump's 10% Tariff Add-On:Impact on China's Fastener Firm?

US-China trade stirs up waves again!

At Eastern Time in the United States, President Donald Trump posted on the social media platform "Truth Social," indicating that starting from March 4th, he would impose an additional 10% tariff on goods imported from China. This is a second round of tariff increases following Trump's signing of an executive order on the 1st, which imposed a 10% tariff on Chinese imports, cumulatively doubling the tariff to 20%!

If the tariff policy persists in the long term, it undoubtedly poses a severe challenge for China's fastener exports, undermining their price competitiveness in the international market. For the United States, it may accelerate technological upgrades and capacity expansion in the domestic fastener industry, thereby changing the competitive landscape of the global fastener industry.
Trade

The United States is one of the important export markets for Chinese fasteners.

Data from 2023 shows that the United States was the top buyer of Chinese fastener exports, accounting for 13.4% of the total export volume, exceeding 1.2 billion USD.

In terms of US fastener imports, China Taiwan and mainland China hold the top two positions, with import quantities and values accounting for 35.6% and 29.35% as well as 34.90% and 17.09% respectively.

Challenge

The United States has once again wielded the tariff stick, a move that undoubtedly brings immense impact and uncertainty to the fastener industry. Every link, from product exports to the supply chain and market demand, may be affected. So, what profound impacts will it have on the fastener industry?

Increased costs: The originally affordable export products have to raise prices due to the cumulative tariffs. As prices rise, corporate profits are significantly compressed, and they may even face losses.

Reduced market demand: For American buyers, a decrease in the quantity or an increase in the price of Chinese goods in the market may lead them to look for alternatives from other countries, causing fluctuations in stable market demand.

Risk of supply chain disruption: The impact of the tariff policy is like a domino effect, indirectly affecting the stability of the entire supply chain and even triggering a follow-up increase in raw material prices, making corporate production uncertain.

Breaking the Deadlock

Faced with difficulties, what strategies do fastener companies have? Essentially, they need to focus on cost, profit, management, and market development to help businesses increase revenue and reduce expenses, overcoming hardships and growing again!
Optimize cost structure: Reduce costs by improving production efficiency and optimizing supply chain management.

Increase product added value: Increase R&D investment, develop high-value-added products, and enhance brand competitiveness. For example, titanium alloy fasteners needed for aerospace and lightweight fasteners for new energy vehicles are directions for industry development.

Titanium alloy fasteners for large domestic aircraft come from Orient Blue Sky Titanium Technology Co., Ltd.

Strengthen compliance management: Closely monitor policy changes to ensure business operations comply with regulations and avoid additional risks.

Explore new markets: Reduce reliance on the US market and actively explore emerging markets such as Russia, India, East Asia, the Middle East, and South America.

According to Chinese customs data, in addition to the United States, major export markets for Chinese fasteners include Russia, South Korea, Germany, the UAE, Japan, Brazil, Mexico, and India. These countries and regions accounted for 8.05%, 4.06%, 4.04%, 3.66%, 3.26%, 3.21%, 3.17%, and 2.91% of China's total fastener exports from January to October 2024, respectively. Moreover, Southeast Asian markets like Vietnam, Thailand, Malaysia, Indonesia, and Singapore have seen rapid growth in demand for Chinese fasteners in recent years and are important growth points for China's fastener exports.