Jennifer Pak

So Chinese manufacturers that are still standing, they've built this uncertainty into their business model by looking for ways to hedge the tariffs.

So take that shoe manufacturer you heard from earlier.

James Gao, he's expanded his manufacturing to Vietnam, where the US tariff rate is lower there than the ones placed on China.

So right now, most of his athletic shoes destined for the US are made in Vietnam.

But that hasn't meant that he cuts China out of his operations.

He says for more specialized shoes, he still uses his factory in China because they have the high-end machinery and technical know-how here.

China is still the place to manufacture high-quality stuff.

And on the government level, Beijing has been trying to diversify its trading partners.

And they've been doing it for some years now.

In other words...

They're trying to be less reliant on trade with the U.S., and they've had some success.

Before the Supreme Court's decision, both the U.S.

and China put a brief pause on some trade restrictions and the higher tariffs on each other's exports.

Now, President Trump has used tariffs against China as a threat to lower the trade deficit,

to stop intellectual property theft, to stop the flow of chemicals used to make street fentanyl.

So in theory, this decision on Friday by the Supreme Court might weaken Trump's hand.

However,

China also has its own issues.

Its domestic economy is sluggish, consumption has been weak, which is why some Chinese manufacturers have been selling more to other countries.

And now some of those countries, they're starting to push back on cheap Chinese exports, saying that those exports are destroying their local industries.