You pay more and get less, but Trump calls it winning.
At China’s Wholesale Hub, U.S. Orders Have Suddenly Halted
The Wall Street Journal reports At China’s Wholesale Hub, U.S. Orders Have Suddenly Halted. One Example: Socks.
At the world’s biggest wholesale market in this eastern Chinese exporting hub, American clients have disappeared.
The Americans, or their representatives, used to show up to buy everything from Paw Patrol plushy dolls to Panama hats to toy sniper rifles. The famous Yiwu market here has 75,000 vendors across an area bigger than 1,000 American football fields; no other place sells so much stuff, so cheaply, and for decades, much of it went to the voracious U.S. consumer.
But with President Trump’s latest tariffs on China, which surged to 145% last week, very little of the merchandise makes economic sense for American buyers now.
Yet during a visit by a Wall Street Journal reporter, vendors said they were confident they would survive, sustained by sales to other buyers, and a bit perplexed.
For some everyday items, such as socks, they said it might not be easy.
“They could get things from other countries, but I don’t know if the other countries can produce them as well as China,” said Zhou Li of socks maker Shen Li, referring to the U.S. “China’s ability to make stuff is just seriously incredible.”
At Yiwu, which has five enormous districts, each with multistory buildings, part of District Four’s first floor is dedicated to socks. Most are made in a nearby city called Zhuji, which Chinese state media has called “the sock capital” of the world. One subdistrict of Zhuji produces some 25 billion pairs of socks a year, or about a third of global socks production, state media Xinhua said.
In 2023, China accounted for 56% of American imports of socks and stockings, data from the International Trade Center’s Trade Map showed.
Socks are a low-margin item, however. Lowering their prices to offset the 145% American tariffs—which are paid by the importers—wouldn’t be feasible for sock makers, the manufacturers said.
One sock maker at the wholesale market, Zhuji-based Today Vision, usually ships around half a million pairs to the U.S. each year. Orders for the U.S. market stopped coming after tariffs started moving higher this year, said Yang Aihua, who on Friday was waiting to hear back from one overseas client as Trump tariff news kept breaking.
Behind her, a sign displayed an ode to socks, in English: “A pair of socks, warm as spring sun, soft as sheep. The comfort of the toes feels like a gentle embrace…Every day it accompanies you, warm as home.”
Today Vision’s socks, produced by a couple hundred workers at a plant in Zhuji, are typically priced at around 25 cents or slightly higher per pair, said Yang, 46. About 30% of them go to the U.S., with the rest going to China and other overseas markets. Among Today Vision’s models, Americans prefer ones with simple colors and woven with 100% cotton, Yang said.
Other countries, especially Pakistan, Honduras and El Salvador, also make lots of socks, and can likely pick up some of the slack if orders no longer come from China in large volumes.
But China’s prices and speed, backed by an army of skilled workers, are hard to beat. American consumers might have to pay more to buy from other countries, and could face capacity constraints if they suddenly shift orders for millions of socks to other places.
At the stall for Shen Li, which is based in Zhuji, Zhou said her company produces about 1.2 million pairs of socks a month. It is a family business and relatively small by Chinese standards, with about 20 employees.
Before U.S. orders suddenly dried up recently, Shen Li used to ship about 200,000 pairs to the U.S. every three or four months, Zhou said. Besides plain cotton socks, her buyers that sell to the U.S. typically prefer socks with prints, Zhou said, pointing to her booth’s wall filled with hanging samples sporting designs such as full beer glasses, kiwi fruits, bearded Santas and TikTok logos.
“We are just one small factory, not one of those big ones. So imagine how much is produced by the entire Yiwu city—it means the economic power and the amount of production of the area is really astounding,” she said.
Making Sock Manufacturing Great Again Math
20 employees produce 1.2 million pairs.
To produce a billion socks would take 16,667 workers. This is output for the world, not just the US.
Perhaps we could get 3,000 jobs back making socks in the US.
Grok Estimated Price Range for US Production
- U.S. labor is significantly pricier than in developing countries. Labor costs in the U.S. can range from $1–$2 per pair for basic socks, compared to as low as $0.20 per pair in some overseas markets.
- Basic socks, large-scale: $1–$2 per pair.
- Mid-range (custom, smaller runs): $2–$4 per pair.
- Premium/custom socks: $5–$7+ per pair.
To produce socks in the US, about 3,000 people would benefit, and 340 million people would lose.
There is no economic reason to produce socks in the US.
Trump calls this winning.
Trump’s Plan to Make Manufacturing Great Again in Pictures
On a broader scale, this morning I discussed Trump’s Plan to Make Manufacturing Great Again in Pictures
The share of manufacturing employment keeps declining. What role did NAFTA play?
Please read that post. I discuss manufacturing in detail. Socks are one tiny example.
Also see China Halts Rare Earth Exports Desperately Needed by the US
China can and has responded to US tariffs.