Orient Securities·2025-09-18 13:41Group 1: Trade Policy and Market Dynamics - The uncertainty of U.S. trade policies is expected to continue decreasing, which will drive export growth[4] - The implementation of the 40% "transshipment" tariff by the U.S. on August 7, 2025, is seen as a catalyst for Chinese companies to expand overseas despite concerns about reduced investment motivation[5] - China's export share remained high at 16.2% in Q2 2025, despite the severe tariff environment, indicating strong performance in indirect trade channels[21] Group 2: Supply Chain and Export Strategies - The indirect trade channels have become a crucial support for exports, with the share of U.S. imports from China dropping to 9.4% in the first half of 2025, the lowest since 2017[21] - The U.S. Customs and Border Protection (CBP) identified potential unpaid trade duties exceeding $400 million, with at least $250 million related to China, highlighting the ongoing scrutiny of trade practices[9] - Enhancing the localization rate of exports is essential for maintaining compliance with U.S. regulations, with current localization rates in countries like Thailand and Vietnam around 64.5% and 40% respectively[36][46] Group 3: Long-term Strategies and Risks - The report suggests that increasing the diversification and depth of overseas supply chains is a superior long-term strategy to counter the "transshipment" tariffs[39] - The risks associated with U.S. trade policies include potential economic disconnection and the uncertainty of model assumptions not aligning with reality[2][47] - The ongoing pressure from the U.S. for stricter origin verification may lead to increased operational costs for countries exporting to the U.S., necessitating further investments[36]