On July 24, 2026, the U.S. imposed a new round of Section 301 tariffs, applying 10% to 12.5% duties on 60 trading partners, covering over 99% of total U.S. import value.
When the news broke, many in China had the same first reaction: Chinese exports are doomed.
But reality tells a different story. During the hearing process, over 1,500 U.S. companies and industry associations submitted formal petitions to the USTR, requesting expanded tariff exemptions. Ford, Nestlé, Tesla, eBay, Mars, McCormick—these household-name American companies—said the same thing, almost in unison: We cannot live without China's supply chain.
Why? With tariffs climbing higher and higher, why are U.S. buyers still placing orders? Let's break it down.
Let's start with a fact that frustrates many U.S. companies.
Nestlé stated flatly in its petition that palm oil imported from Thailand and Malaysia should be exempt because "no equivalent domestic substitute of comparable quality exists." McCormick petitioned for exemptions for multiple spices and herbs, emphasizing the irreplaceability of these raw material imports.
Retail giant Tractor Supply put it even more bluntly: domestic production capacity for essential rural goods is extremely low or even zero. Tariffs cannot change overseas production behavior—they will only pass costs on to retailers and consumers.
eBay also joined the call, requesting a full exemption for secondhand goods—tariff signals simply cannot reach the production side and only end up hurting secondhand trading platforms.
In plain English: I want to buy in America, but America doesn't make this product. This isn't about "Chinese goods being too cheap"—it's about "only China can supply this product reliably."
Merchants at the Yiwu International Trade City in Zhejiang told Yicai reporters that Yiwu products have a degree of irreplaceability in terms of service, quality control, and pricing—which is why U.S. customers continue to place orders even after tariff disputes.
Why can only China supply reliably? The answer lies in the fundamental logic of supply chains.
Xinhua News Agency provided a detailed analysis in one of its economic Q&A articles: from opening to daily operations, a mid-to-high-end hotel requires tens of thousands of standardized products—furniture, lighting, upholstery, bathroom hardware, tiles, tableware, mechanical and electrical fittings. Developers consider three factors when selecting suppliers: price, quality, and delivery lead time.
Without subsidies or policy constraints, companies need to procure products that meet brand standards within established budgets—and buying Chinese products is the path of least resistance.
Why?
Because China has industrial clusters. Sourcing lighting from Zhongshan, Guangdong; bathroom hardware from Ningbo, Zhejiang; ceramic tableware from Chaozhou, Guangdong—these regions can complete the entire process of design prototyping, mass production, and consolidated shipping in one location, dramatically reducing communication and time costs.
U.S. buyers order from China not because they "like China," but because the industrial clusters here can meet their needs with the lowest cost, fastest speed, and most consistent quality. A single U.S. factory simply cannot compete on cost.
Donald Trump once admitted in a speech that while running his hotels, he often "had no choice" but to buy Chinese goods, citing "price and other reasons." The campaign souvenir shop at Trump Tower also features mostly products made in China.
If even the president can't bypass this market reality, how can ordinary businesses?
Xinhua's commentary cut to the chase: "Forcibly severing global supply chains through administrative means will only erode efficiency and drive up costs." Markets naturally tend toward rational resource allocation and efficiency gains through specialization. None of this will change because of protectionist policies.
The collective petition of over 1,500 U.S. companies is exactly the evidence. The proposed tariffs are not only unlikely to achieve the stated policy objectives—they will directly weigh on U.S. businesses, and the ultimate cost will be passed on to American consumers.
If you're involved in food or food packaging procurement and wholesale in the U.S.:
1. China remains the only source for "full category, large volume, stable supply." Southeast Asia, Japan, and South Korea can complement, but they cannot replace China's production capacity and industrial cluster advantages in the short term.
2. Budget for tariffs, but don't fantasize about "perfect substitutes." The past few years have proven that tariffs cannot change the reality of industrial chains. The petitions from over 1,500 U.S. companies are the best evidence.
3. Choose leading Chinese suppliers with strong FDA compliance capabilities. Their export systems and compliance documentation are already highly mature—for example, before exporting Gansu chili powder to the U.S., Jiuquan Customs helped companies improve quality management systems to meet FDA standards, and launched the "Gannong Waimao Tong" mini-program to help companies check destination countries' policies and regulations with one click. Compliance isn't an obstacle—it's a prerequisite.
Tariffs keep rising, yet U.S. buyers keep ordering from China—not out of patriotism, but because the math doesn't work any other way. Market laws don't care about slogans—they care about cost and efficiency.
