The tariff standoff is not just bad news

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Headline | Visual China

Tiger Sniff Note: Last night, Trump posted on social media that, given that over 75 countries have called the US representative office to negotiate solutions on issues related to trade, trade barriers, tariffs, currency manipulation, and non monetary tariffs, and these countries have not retaliated against the US in any way or form at Trump's strong suggestion, he has approved a 90 day suspension measure. During this period, the equivalent tariff will be significantly reduced to 10%, and the suspension measures will take immediate effect.

Article Summary

The escalation of the China US trade war in 2025 has caused global market volatility, with A-shares plummeting at one point. The article analyzes the impact of tariff confrontation on various industries, including semiconductors (accelerated domestic substitution), agriculture, forestry, animal husbandry, and fishery (policy and price support), blood products (import substitution), and tax exemptions (policy benefits); Consumer electronics (rising costs), medical consumables (weakened competitiveness), and shipping non-ferrous metals (shrinking demand) are impacted; Banks, insurance, and home appliances have both advantages and disadvantages, and risks need to be evaluated in conjunction with market changes.

•    Semiconductors: US tax hikes drive domestic substitution of mature process chips, providing opportunities for development in equipment and EDA processes.

•    Agriculture, forestry, animal husbandry, and fishery: The combination of tariff countermeasures and favorable policies for the seed industry has provided short-term support for the seed and grain planting sectors.

•    Blood products: The price advantage of imported albumin from the United States has decreased, and domestic blood product companies have benefited from supply substitution.

•   ️ Duty free industry: The "buy and refund" policy stimulates consumer return, and tax-free leaders are receiving short-term funding support.

•    Consumer electronics: US tariffs on Vietnam and India may result in cost shifting for Apple, putting pressure on domestic supply chain performance.

•    Bank insurance: The trade war has suppressed the demand for manufacturing loans, but high dividends and savings insurance have become safe haven options.

On the early morning of April 3, 2025, the Trump administration announced a comprehensive escalation of the trade war, targeting not only China but also major economies around the world. The next day, China quickly launched a strong countermeasure. This seemingly tariff friction confrontation is essentially a fierce game between the world's largest consumer country and the largest manufacturing country.

The shadow of tariffs quickly enveloped the global financial market, causing a collective sell-off of risky assets, and the global capital market seemed to be caught up in a storm of bloodshed.

The A-share market has not been spared either. On April 7th, nearly 3000 individual stocks hit the limit down, and the Shanghai Composite Index fell 7.34%. Despite the positive guidance of policies, market sentiment rebounded in the following two trading days. However, as long as the trade war situation does not ease, investors' concerns are still difficult to calm - which industries' fundamentals will be impacted? What areas have benefited from this tariff game and emerged from an independent market?

Positive industries

(1) Semiconductor

The core purpose of imposing tariffs is to promote the return of manufacturing, increase the cost of imported goods, thereby prompting capital to flow back and rebuild the US manufacturing industry, especially the high-end technology industry.

Only by mastering high-end technology and financial discourse can the United States reap the benefits of the world. As for low-end manufacturing industries such as clothing, textiles, and mobile phone assembly, the United States does not care.

With the increase of tariffs, the import cost of mature process chips in the United States has significantly increased, leading to a significant decline in its competitiveness in the Chinese market.

In other words, mature foreign chips are facing unfavorable situations, while mature domestic chips are welcoming favorable conditions, which is conducive to domestic substitution. For example, mature process simulation chips, etc.

In addition, this incident will also make China realize the importance of high-end technology industries represented by semiconductors, and domestic substitution is expected to accelerate further. And the bottleneck links such as semiconductor equipment and EDA have also ushered in rapid development opportunities. For example, domestic semiconductor companies will be more inclined to choose domestically produced equipment from companies such as Northern Huachuang, Zhongwei, and Tuojing Technology in order to reduce their dependence on American equipment.

It is worth noting that the proportion of semiconductor equipment exported to the United States is very small and is basically not affected by tariffs.

Overall, in the context of the China US trade friction, analog chips represented by Shengbang Shares, semiconductor equipment represented by Northern Huachuang, EDA represented by Huada Jiutian, and other links will usher in new development opportunities and be favored by the capital market.

(Miaotou Researcher: Dong Bizheng)

(2) Agriculture, forestry, animal husbandry, and fishing

Approved by the State Council, a 34% tariff will be imposed on imported goods originating in the United States starting from April 10, 2025. In addition, China has imposed tariffs of 10% -15% on agricultural products (corn, soybeans, etc.) produced in the United States since March 10th.

In addition, the Central Committee of the Communist Party of China and the State Council have issued the "Plan for Accelerating the Construction of an Agricultural Strong Country (2024-2035)". Among them, it is mentioned to promote comprehensive breakthroughs in independent innovation in the seed industry. Deepen the implementation of the Seed Industry Revitalization Action, accelerate the realization of seed industry technological self-reliance and independent and controllable seed sources.

Currently, China's soybean imports are highly dependent on overseas markets, and this tariff countermeasure policy has provided favorable support for soybean and soybean meal prices. However, due to the more diversified sources of soybean imports in China in recent years, the proportion of imports from the United States has decreased, and it is expected that the impact on the price side will be limited compared to 2018. The fluctuation of soybean prices may drive up the prices of grains such as corn and wheat, and coupled with the rising market sentiment, it is expected to benefit the domestic seed industry and grain planting related sectors.

Although the trade war has intensified import barriers for seed sources, objectively promoting domestic attention to "autonomous and controllable seeds" and accelerating the research and policy promotion of genetically modified technology. However, at present, the commercialization of genetically modified organisms is still in the expected stage, and it will take time to truly land. There is a lack of foundation for performance realization in the short term, and related stocks are mostly driven by themes.

The pig farming sector has also risen sharply against the trend recently. The logic of market transactions is that tariffs have raised concerns about demand for soybeans, corn, and other crops. Corn (energy feed) and soybean meal (protein feed) are the main raw materials for pig fattening, accounting for about 80% of its total raw materials, while feed costs account for 55% of breeding costs. So the market generally expects that the rise in feed prices will weaken the risk resistance ability of pig companies, thereby accelerating the process of de stocking.

But we need to recognize that this reaction is more of a speculative expectation, and the pig cycle has not come yet. Whether the market can truly achieve active de stocking still needs further observation. Currently, under the self breeding and self raising mode, pig farming is still in a profitable cycle, which is also the biggest obstacle to proactive de stocking.

At present, the cost of pig farming industry is about 15 yuan/kg. In theory, only when the pig price drops below the industry's cash flow cost, that is, below 13 yuan/kg (the industry's non cash cost is about 2 yuan/kg), will pig enterprises experience cash flow losses, and there may be a situation of active de stocking at that time.

Based on a feed to meat ratio of 2.5 and a feed price of 2.7 yuan/kg, the cost of fattening is 6.75 yuan/kg. It can be inferred that for every 10% increase in feed prices, the cost of fattening for pig enterprises will increase by about 0.54 yuan/kg (assuming other raw material costs remain unchanged). To reduce the cost of pig farming by 1.76 yuan/kg (as of April 9, 2025, the average price of three yuan pigs abroad is 14.76 yuan/kg), feed prices need to increase by about 27%.

(Miaotou Researcher: Ding Ping)

(3) Blood products industry

On April 4, 2025, the Tariff Commission of the State Council of China issued a notice that from April 10, 2025, an additional 34% tariff will be imposed on all imported goods originating in the United States on top of the current applicable tariff rate, with blood products, which account for a large proportion of imports, being the first to be affected.

The United States is the core region for global plasma supply, with its plasma collection accounting for 70% of the global total. While about 60% of Chinese human albumin comes from imports, the United States has become the largest importer, accounting for about 60% of China's imports of human albumin products. That is to say, nearly 40% of the blood albumin in China comes from the United States.

Combined with the sales price, taking 10g specification human serum albumin as an example, the current terminal sales price of domestic human serum albumin products in the hospital is in the range of 358-448 yuan, while imported products are in the range of 358-560 yuan. The price advantage of imported products is not very obvious. After imposing a 34% tariff on imported products in China, it will have a price impact on terminal prices, directly weakening the price advantage of imported albumin products from the United States and driving domestic product sales.

In addition, under the trade war, if there is a shortage of supply of domestic human serum albumin products due to this impact, it may also drive up the price of domestic human serum albumin products, which is beneficial for blood product enterprises to layout domestic human serum albumin.

(Miaotou Researcher: Zhang Beibei)

(4) Duty free business

On April 8th, the State Administration of Taxation issued a notice clarifying the "buy and refund" policy for outbound tax refunds, which will be promoted nationwide. The next day, China Duty Free Group's A-share market hit the daily limit up, and Hong Kong stock prices surged by 24%. At the same time, although import costs have skyrocketed after the imposition of tariffs, the duty-free industry is seen as the biggest beneficiary, so it has attracted considerable attention in the capital market in recent times.

In the short term, the logic of capital's focus is that tax-free industries have the dual attributes of "zero tariffs+high quality", which can become the core lever for policy support of consumption; Hainan Island Duty Free 2025 Q1 sales increased by 37% year-on-year, and the price difference advantage of duty-free channels may further promote consumer return.

The target group of the buy and return policy is foreigners visiting China. According to data from the Immigration Administration, a total of 6.212 million Chinese and foreign personnel entered and exited the country during the recent three-day Qingming Festival holiday, an increase of 19.7% compared to the same period last year; Among them, 697000 foreigners entered and exited the country, an increase of 39.5% over the same period last year. In the future, as the potential for inbound tourism consumption is released, China's duty-free industry can still gain more growth.

However, the recent surge in tax-free stocks is mainly due to the pursuit of short-term funds, and whether there is a fundamental change in the track logic and actual growth situation still needs to be continuously observed.

(Miaotou Researcher: Duan Mingzhu)

Negative industries

(1) Consumer Electronics

The main industries directly affected by the trade war are those that rely on exports, especially in the fields of electronics, machinery, and steel. For example, in the field of consumer electronics, the US government has imposed tariffs on imported goods from China and other regions, resulting in a significant increase in production costs for brands such as Apple.

However, Luxshare Precision stated, "In the electronic manufacturing supply chain enterprises, it is usually agreed with customers to adopt the FOB model (i.e. offshore price), and the supply chain enterprises do not need to bear tariffs, which are borne by the importer (customer)

Apple has long relied on China's supply chain. Since Trump imposed tariffs in 2018, many companies have gone to Vietnam and other places to build factories, such as Lite On Precision, GoerTek, and Lens Technology.

And this time, the United States has imposed tariffs of 46% and 26% on Vietnam and India. If Apple is under full tariff pressure, even high margin Apple phones cannot withstand it.

Apple may pass on this cost to consumers, and it is expected that iPhone prices will rise, causing consumers to purchase other phones and resulting in a decline in sales. However, domestic consumer electronics companies mainly bind to Apple's major customers, and their performance may face the risk of decline.

In the future, whether Apple can apply for exemption from tariffs or apply for partial exemption from tariffs will become an important measure for the pessimistic expectations of consumer electronics, which needs to be continuously monitored.

(Miaotou Researcher: Dong Bizheng)

(2) Medical low value consumables such as needles and syringes

China exports a wide variety of medical device products to the United States, covering multiple fields. Among them, medical low value consumables are an important category for export, such as syringes and needles, gloves, masks, etc., which occupy a large market share in the United States due to their cost-effectiveness advantages. 80% of needles and syringes in the United States come from China.

From this, it can be seen that domestic medical low value consumables enterprises such as needles and syringes exported to the United States have been greatly affected by this incident.

After the imposition of tariffs, the prices of these products will correspondingly increase. If the original price of the syringe was $1 per unit, after the imposition of a 34% tariff, its price in the US market may increase to around $1.34, significantly weakening the competitiveness of Chinese medical low value consumables related products in terms of price.

In addition, medical device products from other countries may also seize market share. Like India, whose products are similar in price to Chinese products, although the United States has imposed tariffs on them this time, the magnitude is only 26% lower than domestic tariffs. They may gain an advantage in selling prices in the US market, and American customers may turn to products from these countries.

Domestic dependence on exports, especially for medical low value consumables companies with a large market share in the United States, may face significant pressure on their business performance in 2025. In the future, they need to explore other markets outside of the United States for hedging and cautious investment avoidance.

(Miaotou Researcher: Zhang Beibei)

(3) Shipping and non-ferrous metals

If the global trade friction enters the stage of "head-on confrontation", the global trade volume will inevitably decline significantly, and the shipping sector will be the first to bear the brunt. Among them, the most significantly impacted may be container transportation, followed by dry bulk transportation.

Dry bulk cargo ships are mainly used to transport bulk commodities such as iron ore, coal, and grain, and the agricultural tariff policy between China and the United States will directly affect the transportation scale of such goods. If China suspends imports of US soybeans and instead purchases from Brazil, although the overall trade volume may decrease, the pressure on dry bulk cargo can be alleviated to some extent due to longer transportation distances.

In contrast, the trend of oil tanker transportation is more complex. On the one hand, the global economic downturn will indeed suppress crude oil demand and drag down freight rates; On the other hand, as OPEC continues to increase production and oil prices continue to decline, some countries or companies may take the opportunity to increase their reserves and replenish them, thereby boosting oil transportation demand in the interim.

The contraction of global trade volume is often accompanied by a slowdown in economic growth, which significantly suppresses the demand for industrial metals such as copper and aluminum. In this uncertain macro environment, the safe haven nature of gold has become prominent, and with central banks continuing to increase their holdings of gold, in the long run, gold still has strong upward potential. But in the short term, if the market focuses on trading expectations of economic recession, risk assets will be sold off, and gold will also be affected by liquidity shocks.

As a precious metal, silver will have a different trend from gold. When pessimistic economic expectations and optimistic interest rate cut expectations coexist in the market, silver's performance is usually inferior to gold. This is not only because silver lacks the safe haven properties of gold, but also because its industrial properties are constantly increasing - currently, industrial demand accounts for more than 50% of total silver demand, making it more susceptible to the impact of economic cycles.

(Miaotou Researcher: Ding Ping)

It is a double-edged sword for these industries

(1) Banking industry

Fundamentally speaking, the banking industry will be indirectly impacted by high tariffs.

Firstly, manufacturing is gradually replacing infrastructure and real estate as the most important loan destination for banks. High tariffs have a suppressive effect on China's manufacturing exports, leading to an increase in the proportion of non-performing loans in the manufacturing industry.

Secondly, the export sector is under operational pressure, and the demand for credit is weakening. On the one hand, the speed of credit expansion will be affected, and on the other hand, the bargaining power of banks will weaken, putting downward pressure on the net interest margin. According to research by Zhongtai Securities, a one point decrease in credit growth rate may lead to a 14 basis point decrease in net interest margin.

Although the domestic market may hedge against the adverse effects of foreign trade by boosting consumption, it provides support for retail loans in the banking industry. But the income of employees in the export sector will be affected, which will also affect the demand for consumer loans and asset quality.

Overall, the banking industry has been impacted by high tariffs on fundamentals, and there is some downward pressure on credit from quantity to price. But from an investment perspective, when there is a market adjustment, investors often lack confidence and place more emphasis on certainty, which benefits the dividend sector. The dividend yield of the banking industry is at a high level in A-shares, which may become a safe haven for funds.

(Miaotou Researcher: Liu Guohui)

(2) Insurance industry

The impact of high tariffs on the insurance industry has both positive and negative aspects. The insurance industry collects premiums from customers on the liability side and invests them to form the investment side. The trade war will have a certain impact on the investment side of insurance and a positive impact on the liability side.

The net profit of listed insurance companies in 2024 has significantly increased, mainly due to the lucrative investment returns brought by the 9.24 market. The high elasticity of the stock market is a double-edged sword for insurance companies, which can bring both high returns and investment losses. Under the background of the trade war, market confidence may be insufficient, and the stock market may find it difficult to have stable and sustained performance, which will bring pressure to the investment side of the insurance industry.

From the perspective of debt, the increased uncertainty in the investment market brought about by the trade war will be beneficial for the growth of demand for savings insurance. Including products such as extended life insurance and annuity insurance, the income is written into the contract and is rigidly redeemed. Although the predetermined interest rate has been lowered, if the trade war triggers turbulence in the investment market, a portion of the hedging demand will be diverted to insurance products, leading to a recovery in demand.

(Miaotou Researcher: Liu Guohui)

(3) Home appliances

With the increasing uncertainty of the external environment, rigid consumption driven mainly by domestic demand will become the cornerstone of China's stable economic growth. Policy support, market potential, and industry concentration have also become key factors driving the growth of the consumption track. Many stocks in the consumption track continue to have stable dividends and have dividend stock attributes, providing investors with a dual value of defensive and growth. For example, some Baijiu industry leaders, Kweichow Moutai, etc.

Consumer goods companies with a high proportion of exports to the United States, such as home appliances, textiles, and clothing, will face rising costs and decreased price competitiveness, which may lead to order transfer or profit margin compression. Some companies may accelerate the transfer of production capacity to Southeast Asia, Mexico and other places to avoid tariffs, but this will increase the cost of relocation in the short term.

Like the home appliance industry. At present, the global layout of domestic home appliance leaders is relatively early and extensive, and the market share in the United States will be relatively small. For example, Gree Electric stated that its products have entered over 190 countries and regions, particularly achieving sustained and stable growth in markets such as the Middle East, Europe, and Southeast Asia, with a relatively low market share in the United States. Midea Group's North American business accounted for less than 5% of total revenue in 2024. In Hisense Home Appliances' US products, the export value from China, Thailand, and Mexico accounts for approximately 1.8%, 0.5%, and 0.7% of the total revenue, respectively.

At the same time, the demand for white goods (refrigerators, washing machines) in the US market relies on localization and Mexican production. Chinese white goods leaders such as Haier, Midea, Hisense, TCL, etc. have abundant overseas production capacity layout, which has greatly reduced the negative impact of tariffs. About 60% of Haier Smart Home's products in the US market are supplied by local factories, and 30% come from Mexico.

But there is also a positive side, we should pay attention to the boost of domestic consumption promotion policies on the home appliance industry. According to data from the Ministry of Commerce, since the beginning of this year (8th), consumers have purchased 35.709 million units of 12 major categories of home appliances for trade in, driving sales of 124.74 billion yuan.

(Miaotou Researcher: Duan Mingzhu)

The logic of the above content is deduced against the backdrop of the trade war not easing or even escalating, but if the trade war eases, then the above logic is no longer applicable.

Disclaimer: The content of this article is for reference only. The information or opinions expressed in this article do not constitute any investment advice. Readers are advised to make investment decisions with caution.

This content is the author's independent viewpoint and does not represent the stance of Tiger Sniff. Reproduction without permission is not allowed. Please contact for authorization matters hezuo@huxiu.com

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