Although China and the US have agreed to cut tariffs by 115% for the next three months, the home appliance industry still faces steep duties, a legacy of Trump-era measures and new levies tied to the Fentanyl issue. In the southern city of Zhongshan, one company has remained the country's top refrigerator exporter for 15 years in a row. It's also doubling down on contract manufacturing with confidence. Our reporter Huang Fei spoke with the CEO to see how they're navigating these times.
MICHAEL YAO CEO of Homa Appliances "Tariffs have dropped from 145% to 10%. That gives us at least some certainty. Many US clients are resuming orders, which is a positive sign. However, total duties on our refrigerators entering the US still add up to 55%, which remains a serious burden. Fortunately, the US only made up about 6% of our sales last year, and we expect 8% this year, so the impact on us is relatively limited."
HUANG FEI Zhongshan, Guangdong Province "Many Chinese manufacturers have shifted their supply chains outside of the country. Do you have plans to build factories overseas?"
YAO YOUJUN CEO of Homa Appliances "To manage export uncertainties, we're expanding our global production. We plan to grow our capacity in Southeast Asia, and we are also forming strategic partnerships with existing factories in key markets – such as Africa, the Middle East, and Latin America. We'll share our technology, production capabilities, and create local jobs. These efforts are boosting local economies and are very well received."
HUANG FEI Zhongshan, Guangdong Province "China has made significant breakthroughs in smart manufacturing. Do you believe these tech upgrades help companies like yours maintain a competitive advantage in the global market?"
YAO YOUJUN CEO of Homa Appliances "China used to compete on low costs – land, labor, utilities. That's no longer the case. Today, advances in AI, automation and robotics have made China's manufacturing efficiency world-class. For large-scale production, that means lower costs. Our high-end products now rival – or even surpass – brands from Japan, Korea, Europe, and the US in both tech and design. With that edge, we are steadily gaining ground in global markets."