Impact Of The Trump Administration's Latest Tariff Policy On China's Leather Import And Export

On April 9, 2025, the Trump administration officially imposed an additional 50% tariff on Chinese goods exported to the United States. Combined with the previously effective 54% tariff rate (20% base tariff + 34% newly added tariff), the comprehensive tariff rate surged to 104%. This policy has generated multifaceted impacts on China's leather import and export industry:

Direct cost pressures and declining market competitiveness

China's exports of leather products (such as leather garments, bags, etc.) to the United States face significant cost increases. For example, a $100 leather product costs as much as $204 to enter the U.S. market after tariffs and the price advantage is almost lost. Procurement costs for U.S. retailers have risen at the same time, and companies such as Walmart have warned that commodity prices could rise by 30%-50%. This will lead to a sharp drop in orders, and some small and medium-sized enterprises that rely on the US market face an existential crisis.

Supply Chain Restructuring and Export Diversification
The U.S. tariff policy has compelled enterprises to accelerate supply chain adjustments. While countries like Vietnam and Mexico have attempted to absorb part of China's industrial relocation, their leather processing industrial chains lack comprehensive supporting infrastructure, making them unable to replace China's fully integrated supply chain system (over 90% supporting rate) in the short term. Chinese leather enterprises may pivot to markets such as ASEAN and the EU. In 2024, China's exports to ASEAN grew by 18%, and the Regional Comprehensive Economic Partnership (RCEP) has further reduced intra-regional trade barriers, creating opportunities for export diversification.

Countermeasures and Domestic Policy Offsetting
China has imposed a 34% retaliatory tariff on U.S. goods and restricted exports of critical resources such as rare earths, indirectly disrupting raw material supplies for high-end U.S. leather processing industries (e.g., military-grade and automotive specialty leathers). Concurrently, China has implemented domestic stimulus policies, including a 1.5 trillion yuan special treasury bond issuance and consumer voucher programs, to boost domestic demand and expand the domestic leather consumption market, partially offsetting the pressure from declining exports.

Long-term Challenges and Industrial Upgrading

High tariffs are compelling China's genuine leather industry to accelerate technological upgrading and shift toward high value-added products. For instance, innovative areas such as eco-friendly leather and smart leather products may emerge as new growth drivers, while digitalized production and cross-border e-commerce models could reduce reliance on the U.S. market.

In conclusion, while the Trump-era tariff policies have severely impacted China's leather exports in the short term, they may drive structural adjustments in the industry over the long run. By boosting domestic demand and diversifying global market presence, the sector could ultimately overcome challenges and achieve breakthroughs.