Core Viewpoint - The article discusses the impact of rising tariffs on the foreign trade business of Tonglu Cashmere Knitting Co., Ltd, highlighting the challenges faced and the strategies adopted to navigate the turbulent trade environment between China and the United States [1][3]. Group 1: Tariff Impact on Business - The company has experienced significant challenges due to the U.S. tariff increases, which have compressed profit margins and led to difficult price negotiations with American clients [3][4]. - The U.S. market accounts for 70% of the company's orders, with previous profit margins ranging from 10% to 15% [3][5]. - As tariffs increased from an initial 10% to as high as 34% and 50%, the company faced pressure to reduce prices, leading to a shared burden of tariff costs with clients [5][6]. Group 2: Order Fluctuations and Market Response - The company has seen fluctuations in order volumes due to the uncertainty surrounding tariffs, with some orders being paused despite prior agreements [9][10]. - The seasonal nature of their products, such as scarves and hats, requires timely production and delivery, making the tariff situation particularly critical [10][11]. - Despite the challenges, the company has resumed receiving orders after initial pauses, indicating a willingness to adapt to market conditions [11][12]. Group 3: Market Diversification Strategies - In response to the tariff challenges, the company is exploring new markets, particularly in Europe and the Middle East, to reduce reliance on the U.S. market [11][12]. - The company has shifted its focus from primarily attending U.S. trade shows to participating in European exhibitions, where profit margins are higher and client relationships are more favorable [12][13]. - The company is also enhancing its domestic market presence and investing in product development and market research to stay competitive [13][14]. Group 4: Operational Efficiency and Product Range - The company has implemented a "two-legged" strategy, focusing on both international and domestic markets while improving production efficiency through automation [13][14]. - By reducing the workforce from over 1,000 to around 100 skilled workers and utilizing advanced machinery, the company has significantly increased production efficiency and product quality [13][14]. - The product range has expanded beyond traditional items to include pajamas, sweaters, and scarves, catering to diverse market demands [14][15].