Strain on labour - the statesman

The recent easing of US-China tariffs has undoubtedly pulled China back from the brink of a social and economic rupture. For months, the spectre of mass layoffs haunted the country’s

manufacturing hubs, where labour-intensive industries like lighting, footwear, furniture, and toys bore the brunt of tariff hikes that reached as high as 145 per cent. But even as tariffs

drop to more manageable ~ though still burdensome ~ levels, the structural damage to China’s job market cannot be wished away. The truth is sobering. The tariff rollback has prevented an

immediate crisis, but not a long-term correction. For workers once earning a modest living in factory jobs, the economic disruption has already altered life trajectories. Forced to return to

subsistence farming, they represent a silent but growing population pushed out of industrial employment, not due to their own failings, but because of geopolitical manoeuvres beyond their

control. The relief from Geneva’s diplomatic progress is real but limited. A 30 per cent tariff remains punishing for most manufacturers who compete on thin margins. The Chinese government

may celebrate the de-escalation as a strategic win, but on the ground, companies are still reluctant to resume hiring. Job market confidence cannot be restored overnight, particularly when

American trade policy remains highly unpredictable and subject to electoral cycles. The rural fall-back isn’t just economic regression ~ it is a reversal of decades of urbanisation. As

workers retreat to their villages, the vision of a modern, upwardly mobile China dims, replaced by uncertainty and the return to subsistence livelihoods for millions. More importantly, this

episode underscores the deep vulnerability of China’s export-dependent growth model. Over the years, as domestic consumption has faltered and industrial overcapacity has swelled, exports

have served as a pressure valve. Advertisement But when tariffs weaponise trade, the pressure rebounds inward, straining labour markets and social cohesion. This time, even state

interventions ~ such as increased public investment and stimulus for the services sector ~ may only partially absorb the shock. There’s also a psychological dimension to this disruption. The

belief in manufacturing as a stable path to social mobility is weakening. Workers displaced today may not re turn to factory floors tomorrow, even if opportunities re appear. Many have

already shifted to gig economy roles, citing the volatility of global trade and the fragility of export-based jobs. It’s a shift that signals not just a temporary dislocation, but a more

permanent reorientation in China’s labour landscape. Ultimately, while diplomacy has calmed immediate fears, the deeper challenges persist. China must now grapple with how to rebuild job

resilience in an era where neither low-cost labour nor global markets can be counted on as before. That means rethinking industrial policy, accelerating domestic demand, and ~ most crucially

~ offering displaced workers not just short-term relief, but long-term reintegration. Without that, tariff relief may prove fleeting, and the job market’s pain will linger far beyond the

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