Live from Shenzhen: Day Two After Tariffs
Lunch After the Trade War: Notes from Xichong
I. Tariff Chaos in Washington. Silence in Xichong.
The tariff war escalated fast.
On April 10, the U.S. raised duties on Chinese imports to 125%—covering EVs, lithium-ion batteries, solar components, and AI chip inputs. “Strategic decoupling,” they called it. A bid to protect domestic industry and punish China’s state-backed exports.
China responded the same day with its own hike—to 84% on key U.S. agricultural goods. Then, on April 11, Beijing announced another escalation: tariffs rising to 125% on U.S. soybeans, pork, sorghum, dairy, and wheat. The effective date? April 12. The day I’m writing this.
So: a full-blown trade escalation. A 72-hour spiral of retaliatory tariffs between the world’s two largest economies.
And in Hong Kong?
Nothing. No changes. No government statement. No countermeasures. Because it’s not just a policy choice—it’s a legal impossibility.
Under Article 114 of the Basic Law, Hong Kong is required to remain a free port. “Hong Kong shall not impose any tariffs,” the clause reads.
Three economies. One geopolitical flashpoint. And three completely different reactions.
I crossed into Guangdong the day before China’s final move—April 11. I wasn’t here to analyze anything. I came to visit a friend and have breakfast.
But by lunch, I realized: the tariff war had already reached my plate.
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II. From Free Port to Surf Commune
I left Hong Kong through Huanggang. Quiet checkpoint. Clear skies. The pressure trough hadn’t arrived yet.
I was heading to Xichong—an old village on the back edge of Shenzhen’s Dapeng Peninsula. It’s about 25 kilometers from Hong Kong’s Sai Kung, but it feels like another country.
I first visited 15 years ago, when it was just beach huts and salty air. Now? It’s a miniature surfer commune. Skateboards in the alleys. Surfboards leaning against espresso counters. Cold-pressed juice. Avocado toast. Homemade burritos. Locals and weekenders living a kind of coastal slow life. It’s not Western. It’s just relaxed.
I came with a friend whose son is now one of the surfers. Everyone knows everyone. It’s a village, but it runs on shared gear and shared kitchens. Aqualife.
On April 12, we didn’t make it to the beach. The weather turned overnight. Tariff Day brought rain.
So I ate.
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III. What I Ate Before Lunch
By noon, I’d had:
A cold bottle of soy milk
A soft char siu bao
Hakka-style tofu, seared and stuffed with minced pork
A Coke Zero from a baihua a few meters down the road from old surfboards propped up on a gate for display.
Four items. Only one carried an American logo.
And it was the only one that stayed cheap.
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IV. What Gets Hit in a Trade War (Hint: Not the Brands)
Most people assume trade wars strike logos. They don’t.
Here’s what actually got tariffed on April 11:
Soybeans — 30 million tons annually used to come from the U.S. Now mostly Brazil. But switching isn’t seamless. Soymeal prices rise. Feed costs increase.
Pork — U.S. pork once made up to 13% of China’s imports. Not the supermarket stuff—the premium frozen cuts. Tariffs made those vanish.
Sorghum — Used to make baijiu, China’s ubiquitous liquor. Quietly imported from the U.S. Now quietly not.
Those ingredients don’t scream “Made in America,” but they were—until now. And they sit beneath the surface of meals across China.
That bowl of tofu? Local. But the pig may have eaten U.S. soymeal. And the soy milk? Domestic, maybe. But pegged to a global commodity chain.
The real hits don’t show up in the grocery aisle. They show up in the margins of breakfast.
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V. The Coke Stayed 5 RMB. Here’s Why.
That Coke Zero on my table was the only thing clearly American.
But it’s not imported.
It was bottled here in Guangdong, likely by COFCO or Swire Beverages. The formula is licensed from Coca-Cola Atlanta. But the water? Local. The bottle? Local. The staff? Local.
This isn’t an import. It’s an American brand embedded into Chinese logistics. There is no tariff to apply.
And that’s the story across most American brands:
Apple — Assembles iPhones in Zhengzhou, iPads in Chengdu, and MacBooks in Chongqing and Changsha.
Nike — Made in Vietnam and China. No exposure.
McDonald’s — Spun off to a CITIC-led consortium in 2017. Entirely localized.
Starbucks — Roasts beans and manages supply chain internally. No American shipping needed.
The brand is American. The pipeline is Chinese.
As Yu Hong notes in The Political Economy of Chinese State Capitalism: what matters most is not the flag on the storefront, but the structure behind the shelf.
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VI. Hong Kong’s Free Port Status Isn’t Just Symbolic
Meanwhile, across the border in Hong Kong, tariffs are constitutionally impossible.
That’s not rhetoric. That’s law.
Under Article 114, Hong Kong must remain a zero-tariff zone. It’s why you can buy Wisconsin cheddar and California cherries in Sheung Wan. It’s why there’s no retaliation mechanism in place.
Hong Kong may be politically hybrid—but economically, it’s a time capsule. A rare experiment in unfiltered trade.
And it makes the contrast sharper.
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VII. Why None of This Feels Immediate
On the ground, it’s not chaos. It’s inertia.
The Coke didn’t change price. The tofu still came hot. The pork was there. No visible shortages. No angry shopkeepers. No signs on the freezer.
But the structure has shifted.
The pig’s feed is more expensive. The soy milk floats on a thinner margin. The baijiu bottle gets slightly smaller. It’s not disruption—it’s slow distortion.
As Farrell and Newman wrote in Underground Empire:
“In deeply interdependent systems, economic pressure is exerted through constraint—not shock.”
That’s what a tariff looks like in 2025.
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VIII. What I Learned From Lunch
I thought I’d see big changes.
Instead, I saw the opposite. The American brands—Coke, Nike, Apple—were untouched. Because they’re part of the system now.
What changed was the tofu.
A Chinese dish, made with Chinese pork, sold in a Chinese village, suddenly priced differently because of an invisible shift in global commodity flow.
That’s what modern tariffs do. They don’t change what you see. They change what sits behind it.
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IX. Want to Follow the System Downstream?
Start here:
Yu Hong, The Political Economy of Chinese State Capitalism
Farrell & Newman, Underground Empire
USDA, China Soy and Pork Trade Reports
USITC, Exposure Tracker (2024–2025)