Slowing pace in China's hub for quick clothing production due to tariff conflict
In the bustling city of Guangzhou, the capital of Guangdong Province, the global fast fashion industry hums with activity. However, recent events have cast a shadow over this vibrant sector.
According to data from 2022, more than 30 percent of all small packages imported under the de minimis exemption came from Shein and Temu, two major players in the fast fashion industry. Shein, in particular, accounts for about 50 percent of the US fast fashion industry.
However, the US-China trade war has brought significant changes. In May 2022, US President Donald Trump closed a loophole for goods from China and Hong Kong, imposing tariffs that reached 145 percent on Chinese goods. This move sent shockwaves through the global economy and the fast fashion industry in Guangzhou.
As a result, US apparel imports from China have fallen sharply to their lowest level in 22 years as of May 2025. The value of clothing imports from China to the US dropped from $796 million in April 2025 to $556 million in May, marking the fourth consecutive month of decline.
This steep decline in export orders has translated into reduced production volumes in Guangdong province. US retailers have shifted sourcing to other countries like Vietnam, Bangladesh, and India, further decreasing demand for Chinese fast fashion exports. This shift likely pressures profit margins for Guangzhou manufacturers, as lower order volumes reduce economies of scale and increase per-unit costs.
The impact on garment workers in Guangzhou's urban villages is significant. Workers earn between one and 10 yuan (US$0.14 and US$1.39) per item, often working long hours in cramped conditions. Many workers struggle to find work due to decreased orders from foreign clients. The uncertainty of the trade war could have a negative impact on working conditions, encouraging workers to add hours to their already punishingly long shifts.
While direct data on working conditions in Guangzhou’s garment sector during this period are not provided, economic downturns in export-oriented industries typically worsen labor conditions. Reduced orders often mean layoffs, longer working hours for remaining workers to meet deadlines, or wage cuts to sustain operations.
In addition, the economic impact of the war in Ukraine has been bad for business for Li Jun, a factory boss who runs a denim clothing factory that sells jeans to Russia. With many of his would-be customers having been drafted to fight in the conflict, his orders have significantly decreased.
In light of these challenges, Li Jun and other manufacturers like him are struggling to keep their businesses afloat. At his peak, Li Jun was exporting 100,000 pairs of jeans per month, with more than half going to Russia. Now, he exports 30,000 to 40,000 pairs each month, meaning that he just about breaks even.
Yang Ruiping, a garment factory owner in Guangzhou, has seen about 30 percent of his orders exported, down from more than 50 percent before the COVID-19 pandemic. He expresses little confidence in the US due to the trade war and the potential for increased tariffs.
In conclusion, the US-China trade war tariffs have caused a sharp decline in US orders for apparel from Guangzhou, driving down factory profits and likely straining garment workers due to production slowdowns and cost pressures. The data do not directly mention working conditions but economic impacts suggest potential deterioration in labor welfare.
In the midst of the US-China trade war, the fast fashion industry in Guangzhou, including major players like Shein and Temu, has faced significant challenges. The tariffs imposed on Chinese goods by the US government have led to a steep decline in export orders for Guangzhou manufacturers, affecting not only their profits but also the working conditions of garment workers.
The reduced orders from foreign clients have put pressure on garment workers in Guangzhou's urban villages, who often earn a meager wage, work long hours in cramped conditions, and may be forced to add hours to their shifts due to the uncertainties of the trade war.
