Chinese semiconductor, auto parts suppliers expect to benefit from escalating US trade war

Suzhou Everbright Photonics, a maker of high-powered diode laser and radar sensor chips, said China’s retaliatory tariffs would favor local producers because the "cost of imported chips will be higher and uncertainties in the supply chain will be greater" for domestic clients.

The Shanghai-listed firm added that the trade war would likely accelerate the shift from foreign to domestic chips, as reported by the South China Morning Post.

Chipsea Technologies, based in Shenzhen and known for its semiconductors used in home appliances and vehicles, shared a similar outlook, noting that the tariff dispute would help Chinese-made chips capture more market share.

This optimism reflects growing confidence among Chinese suppliers, seen as increasingly competitive alternatives to U.S. imports, driven by Beijing’s push for tech self-sufficiency and deepening trade tensions with Washington.

Last week, China announced a 34% tariff on U.S. imports in response to similar moves by Washington.

"If China imposes a 34% tariff on all US imports, the competitiveness of our company’s products will become more obvious," Pan Asian Microvent Tech, a producer of micro-venting materials said, adding that its products could outperform U.S. competitor W.L. Gore & Associates, known for its waterproof Gore-Tex fabric.

Flags of China and U.S. are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken Feb. 17, 2023. Photo by Reuters

Some Chinese firms with large operations in the U.S. are passing tariff costs onto customers.

Shanghai Baolong Automotive, a global supplier of tire valves, exhaust pipes, and suspension systems, said it is negotiating with North American clients to absorb most of the increased costs.

Zhejiang Yankon Group, a major lighting appliance manufacturer, announced it would gradually adjust prices, expecting customers to bear the additional expenses.

Trina Solar, a global supplier of solar panels and energy storage systems, said it holds a large stock of battery modules in the U.S. and warned that reciprocal tariffs "may bring about an increase in prices" across the industry.

China announced on Wednesday that tariffs on U.S. goods would increase to 84%, up from the previously announced 34%, starting Thursday, marking a significant escalation in the trade war. In a latest development, U.S. President Donald Trump paused global tariffs but slapped a 125% rate on China.