GUANGZHOU: Chinese toy and gift manufacturers are looking to benefit from reciprocal tariff cuts between China and the United States, with exporters reporting stronger demand from US customers and exploring new markets and product innovations to navigate trade uncertainty.
Christmas is still more than two months away, but Gong Yongqiang is already preparing for next year. Shuttling between the shop, factory, and warehouse, the Yiwu merchant checks raw material stocks and develops new festive decorations.
His shop in the “world’s supermarket” Yiwu, in eastern China’s Zhejiang Province, is lined with Santa Claus figurines in various styles and sizes, the kind that will sit on mantels across the United States by December.
A recent China-US tariff agreement has given him fresh reason to look ahead with confidence.
At their eighth round of economic and trade consultations from Sept 20 to 23, China and the United States agreed on product lists for US$30 billion in reciprocal tariff reductions. The United States will reduce tariffs on Chinese imports, including toys, home appliances, baby products, kitchen and bathroom goods, and holiday gifts.
“I followed the consensus the moment it was announced,” Gong said. “It is undoubtedly a positive signal for foreign trade on both sides.”
Harley Seyedin, chairman and president of the American Chamber of Commerce in South China, said the consensus sends a strong signal to markets and investors, helping businesses gain confidence to invest, expand and create jobs on both sides of the Pacific.
“Certainty is the lifeblood of business,” Seyedin said.
Luo Zhiheng, chief economist at Yuekai Securities, said the tariff reductions signal easing trade relations, although their effect on the overall US tariff burden on Chinese goods remains limited. Their significance, however, lies in creating room for lower tariffs on some non-sensitive products and signalling future policy direction.
Across China’s manufacturing and trading hubs, exporters are already reporting stronger demand from US customers.
At her 15-square-metre store in the Yiwu International Trade Market, Nie Ziqin has packed the walls with Halloween decorations ranging from glowing spiders and pumpkin lanterns to horror masks, offering almost everything an American household needs for Halloween.
“This is this year’s bestseller. One client ordered hundreds of thousands,” she said, holding up a light-up spider. Her factory is working overtime to fulfil cross-border e-commerce orders and ship goods to US warehouses.
“Many American clients are optimistic about China-US economic and trade cooperation,” Nie said. “Mutual benefit and win-win results are what everyone wants.”
Her orders are expected to keep growing, building on a trend that emerged even before the September talks. Her US export orders rose 20 per cent year on year in the first eight months of 2026, with American buyers placing orders earlier than usual.
As the world’s largest Christmas goods hub, Yiwu supplies nearly 80 per cent of the global market and ships more than 20,000 varieties to 178 countries and regions each year. The United States remains an important market for the city. Yiwu’s exports to the United States reached 104.51 billion yuan (about US$15.55 billion) in 2025, surging 25.1 per cent from the previous year.
Further south, toy and gift manufacturers in Chenghai District, known as China’s “toy capital”, in Shantou, Guangdong Province, are seeing changes in both orders and price negotiations. Although Chenghai covers less than 400 square kilometres, it accounts for more than half of China’s plastic toy output and about one-third of global production.
“When tariffs go down, buyers’ costs fall, which leaves more room for both sides. Price negotiation has become less difficult,” said Guo Bo, general manager of Guangdong YiYu Craft & Hardware Electrical Factory Co Ltd, a supplier of plush Santa figures, snowmen and reindeer. Guo expects order volumes to increase by 10 to 20 per cent this year.
Qiu Zhihong, chairman of Shantou Dave Plastic Toys Co Ltd, also reported a recent improvement. His company manufactures licensed products for Disney and Universal Studios, with exports to the United States accounting for 30 to 40 per cent of its exports.
One US customer who previously ordered 100 containers is now ordering 120, Qiu said.
For businesses that weathered last year’s tariff hikes, a pickup in US demand is welcome, but it is only part of the story. From seeking customers in new markets to refreshing the appeal of traditional products, Chinese exporters are finding ways to navigate trade uncertainty.
In Yiwu, Gong has learnt not to rely too heavily on any single market. After the tariff increases, the US share of his sales fell from a peak of about a quarter to around 10 per cent. But orders from Brazil, Colombia and Chile helped fill the gap, expanding his customer base to more than 30 countries and regions.
He is also designing new products. This year, Gong has launched more than 100 new designs, adding sound and movement to traditional static Christmas figurines. He said such features typically boost profit margins by more than 10 per cent. He is now developing an AI-powered Christmas doll that can hold conversations, with a launch planned for next year.
In Chenghai, Qiu is taking a similar approach. Touch-sensitive AI toys are outselling basic models, he said, prompting his company to invest in smarter products and stronger brands. It is also working directly with retailers to cut out intermediaries.
For Chinese exporters, these efforts to diversify markets and innovate products are already opening doors.
Earlier this month, Yiwu merchant Tao Yang secured an order from an American customer for more than 2,000 embroidered denim jackets. The order was modest in value, but it showed how fresh designs and tailored products can help Chinese exporters win over overseas customers and build long-term business relationships.
“When the client came to Yiwu in September, we used AI-assisted design and fine-tuned every detail with him in person. That’s how we met his needs and closed the deal,” Tao said.
Tao noted that Yiwu’s robust supply and industrial chains, along with a keen understanding of the market, power this agility and enable rapid product design and scaled-up production.
Luo said Chinese exporters’ future resilience will depend on diversifying markets, upgrading technology, building stronger brands and expanding their international presence.
