Trump Blinked after Chinese Brands Took to TikTok to Blow Up the Luxury Goods Market

Trump blinked, and China won. Perhaps U.S. President Donald Trump expected China to cave like a house of cards under the weight of his tariff war. But Chinese manufacturers responded to the tariffs by taking to TikTok and exposing the Western luxury brands markets.

Trump likely repealed some of his heaviest tariffs for two reasons: 1) American consumer confidence cratered to a cyclical low point. This means American consumers are planning to spend less on non-essential goods. And 2) Chinese manufacturers seized the tariff war as their cue to start circumventing traditional Western supply lines for luxury goods.

In other words, Chinese producers were ready to undercut the Western middlemen (such as our top brands) and to start selling luxury goods directly to Western buyers.

And they’re not selling “dupes”, either. No, certain Chinese manufacturers maintain that they are, in fact, the actual suppliers for Western brands such as Nike, Timberland, or Hermes—and many others. For example, the Timberland 6-inch boots are produced in China, but for less than 1/7th of the cost. You can get a pair of similar quality boots for just 14$ if purchased straight from China (though the minimum order quantity comes in at 500).

Still, TikTok videos with millions of views have blown up, especially on the American side, exposing the true cost of so-called luxury items. Think of that certain Hermes bag priced at $38,000? It can be produced for just $1,400 in China. Many Americans, especially women, went to TikTok to express both shock and joy at having discovered the truth about luxury bags.

Under normal circumstances, white-label goods, produced by Chinese artisans, are shipped off to Europe or to America, where local companies merely slap on their label and logo, and then pretend it’s “made in Italy”. What people think of as “fashion from Milan” may really be from Shenzhen. Much of what is designed in California by Apple most certainly comes from Shenzhen.

Chinese manufacturers have flooded TikTok with surprisingly well-received videos (probably because TikTok is still “Chinese owned” to some extent, and TikTok corporate “kind of” decided to push these videos out).

Here are just a few of such videos that show what Chinese companies are really the suppliers of Western brands:

• Luna Sourcing exposing Nike and Adidas

• Who’s the Chinese supplier behind Under Armour?

• How Chinese manufacturers are blowing up TikTok

• Women reacting to “China spilling the tea”

• China exposing the luxury industry

• Chinese producers exposing the tariff targets

• The end of the luxury goods market?

Mind you, some or all of these videos may be paid or sponsored videos, or outright propaganda. But the key takeaway is that the Chinese manufacturers aren’t lying about their capabilities. They really are the suppliers to many, if not most, of the Western luxury brands.

If President Trump had continued this tariff war, it could have destroyed the whole Western luxury market.

All of this has something to do with the way the West has constructed the global economy, to its benefit. The idea was that Western corporations, as “brand companies”, would slap its brands and logos onto Chinese-manufactured goods, while pocketing ridiculous markups, sometimes 10 to 40 times as much.

This way of getting rich came from mercantilism, a way of doing business perfected by the elite families that ran the British Empire. You acquire cheap resources from places like Africa, India, or China, and sell them on to your Western consumers at massive markups.

In today’s version of mercantilism, Western corporations aren’t just buying raw materials. They’re buying nearly finished goods. And through the mechanism of the global economic system, the West has kept Chinese manufacturing from selling straight to the West.

However, for several years now, China has been working on direct-to-the-West ecommerce systems, such as Ali Baba, Shein, and Temu, as well as selling through Amazon, where Western buyers can access goods at prices considerably lower than products of an equivalent quality in the West.

(I myself had noticed years ago that certain tools I needed for my mountain bike came in two versions: one with an American brand, and another from an unknown Chinese brand. But it was the exact same tool. In fact, the Chinese brand was the supplier to the American brand. I had a choice of buying either of them on Amazon.com, but the Chinese version was $50 cheaper. That was despite increased shipping costs for goods coming straight out of China.)

Indeed, shipping has been China’s major bottleneck. Shipping goods straight from China to Europe can take up to 6 weeks for individual Amazon orders.

That’s probably why China has, in fact, purchased the harbor of Petraeus in Greece, and attempted even to buy the Hamburg harbor in Germany. By buying harbors, and by building railroads from East to West (the Belt and Road Initiative), China has been quietly linking itself up to the Western markets.

In a way, the distance between China and European markets has been shortened. I.e., in the sense that it’s going to be cheaper for many Europeans to start buying Chinese instead of American. After all, the American-branded goods are made in China anyway, so why not buy the same products but from much cheaper labels?

The Guilded Age of mercantilism is coming to an end. The brand of the USA as a whole is also taking a hit. Having waged way too many wars, China emerged—without firing a bullet—as a kinder, more trustworthy partner, not so much the bully that many see in the United States.

And now American consumers may no longer wish to purchases overprice goods from American brands, either.

All China needed to do was to start convincing Western audiences that their products are no longer “dupes” or “low quality”, but are, in fact, the real deal. And the tariff wars just made that happen. This process cannot be reversed. The West must prepare for a long recession.