Great reversal of tariffs! The US tax rate on China has sharply dropped to 30%, causing market shock far exceeding expectations. The latest news from official media shows that since early April, US orders have experienced a "V-shaped rebound", quickly shifting from a brief stagnation to a sustained return. It is worth noting that there is currently a phenomenon of "premium procurement", and most US merchants accept a 30% price increase to lock in the Chinese supply chain. Taking the Guangdong silicone industry belt as an example, after the export orders generally implement new quotations, US buyers quickly complete wire transfers for payment. The industry believes that the current silicone industry is facing a dual game: 1) the price transmission mechanism takes effect: 30% tariff reduction and 30% export price increase form a hedge, and the profit space of industry enterprises is repaired. 2) The pressure of capacity regulation is prominent: Mr. Wu and other industry insiders pointed out that there is a risk of "false prosperity" in the current industry chain, and sudden production is unsustainable. The current industry is experiencing a surge of undercurrents, and the three top individual manufacturers have been in close negotiations“ The plan of reducing production and increasing prices includes setting up a price corridor and establishing a dynamic price range mechanism; implementing a production capacity adjustment plan, where each enterprise plans to reduce production by 15-20% to stabilize the market. According to informed sources, a key industry meeting will be held this week to focus on observing whether the production reduction plan can form an alliance style implementation, the binding force design of the price control mechanism, and the coordination of medium and long-term production capacity planning.
How can downstream respond to the suspension of the tariff war? Small and medium-sized organic silicon enterprises can develop multi line businesses by operating multiple cross-border e-commerce platforms. In addition to following in the footsteps of the Four Little Dragons of going global, organic silicon companies can also choose local e-commerce platforms with significant market influence. After all, the international influence of China's organic silicon industry chain is increasing day by day, and many foreign and local platforms are eager to invite Chinese sellers to join.
For example, in the second half of last year, the wholly-owned subsidiary platform of Otto Group in Germany, limango, the second largest e-commerce platform in France, Fnac&Art, and the local e-commerce platform Fruugo in the UK successively extended olive branches to Chinese sellers; Coupang, the largest e-commerce platform in South Korea, held investment conferences in Shenzhen, Yiwu, Xiamen, Ningbo and other places; At the end of last year, Wildberries, Russia's largest e-commerce platform, fully opened up Chinese sellers to join. It can be said that there are many choices for silicone companies to go global.
Of course, the most important adjustment strategy for small and medium-sized organic silicon enterprises should still focus on products, by improving product strength, building their own brands, and enhancing bargaining power. In other words, higher product quality and better brand reputation can bring greater market discourse power. For small and medium-sized organic silicon enterprises, this is the most effective "weapon" to resist any risks. As the saying goes, "Learn from a setback and gain wisdom." After experiencing a tariff storm, small and medium-sized organic silicon enterprises need to be more vigilant about the future, consider long-term layout while developing in the short term, and avoid repeating the same mistakes on the sea route.