US tariffs still a challenge but won’t stop Chinese manufacturers expanding globally

Yesterday (12 May) brought news of a détente in the trade war between the US and China, as both countries agreed to cut tariffs on each other’s imports by 115%.

The announcement still means that a relatively high tariff of 30% will still be applied to imports of Chinese goods to the US, compared to 10% on US goods to China, at least for the next 90 days.

A series of announcements from the Trump administration of tariffs on Chinese goods since the start of the year may have been designed to stunt the growth of Chinese manufacturers’ exports.

But major Chinese construction equipment OEMs have told Construction Briefing how they remain committed to selling their products into markets around the world.

A trio of Chinese firms – Lovol Heavy Industry, XCMG and Zoomlion – have all confirmed to Construction Briefing that international expansion remains a key part of their strategy, even if choppier international trading conditions mean it takes them a little longer to carry out their plans.

Yang Dongsheng, chairman of XCMG, which sits fourth in International Construction’s Yellow Table – a ranking of the world’s biggest construction OEMs – told International Construction’s Andy Brown that international sales already account for 50% of its revenue.

The ultimate target will be over 55%, he added. “Actually, it was the target for this year. But this year the international situation – lots of tariff and competition in different regions – means there are lots of uncertainties with the global business. And so we will reconsider this very carefully.”

Yang Dongsheng, CEO and chairman of XCMG, gives a thumbs-up after a press event photo-op (Image: Mitchell Keller)

Similarly, Zoomlion, which sits 12th in the Yellow Table, is shooting for further growth in its main international markets in the global south, in addition to Europe and North America. “Our main markets are in Russian-speaking regions, Southeast Asia, and the broader Asia-Pacific. South America is also growing rapidly,” said Zoomlion’s co-president Luo Kai.

He explained that the company’s overseas revenue increased by 30.6% year on year in 2024 and now accounts for over 50% of the firm’s total revenue.

Mr Wang Bin, managing director of Lovol Heavy Industry – also a member of the Yellow Table – which made its debut at the Bauma construction equipment exhibition in Germany this year, told Construction Briefing that its sales are also divided equally between Chinese and international markets but that it expects international sales to expand further in the future.

“Lovol’s export markets span across numerous countries and regions globally, among which countries along the Belt and Road Initiative’, Southeast Asia, Africa, and South America are important export markets,” he said.

He said Lovol had achieved “full regional and market coverage” in the Americas, with local operations in Brazil and Mexico. The company’s strategy also involves targeting Europe and North America, although US President Trump’s trade war with China had only just started to escalate when Construction Briefing spoke with the company at Bauma.

Localisation, localisation, localisation

Zoomlion’s co-president Luo Kai emphasised the manufacturer’s focus on Europe and its efforts to establish local research and development (R&D) and manufacturing bases in the region.

Of its 11 R&D and manufacturing bases globally, seven are in Europe, including: a new €100 million mobile elevated work platform (MEWP) manufacturing facility in Hungary; concrete pump and mixer manufacturer CIFA in Italy; dry-mixed mortar equipment manufacturer M-TEC, Wilbert TowerCranes, and Rabe, all three of which are in Germany; plus sites in Belarus and Turkey.

Zoomlion’s announcement that it was building the new Hungary facility came earlier this year, at around the same time as it emerged that the company is one of several MEWP manufacturers facing additional tariffs on machines imported to the European Union.

“We are pursuing an ‘end-to-end, digital, localised’ overseas strategy, directly connecting with clients and markets through an efficient sales structure. This will ensure long-term, sustainable growth,” said Luo Kai.

Chinese OEM Zoomlion exhibited a wide array of machines at Bauma under the theme “Greener Development, Brighter Future”. It displayed 60 flagship products across nine major categories (Image: Ervin Bedeli)

“Localisation is especially important. The new phase of the Wilbert factory, covering over 60,000 sq m with an investment of more than €50 million, will expand production of tower cranes, truck cranes, and concrete machinery. When fully operational, it will deliver more than 1,000 units annually worth about US$300 million, serving as an integrated hub for sales, manufacturing, and service,” he added.

Lovol continues to improve its global product portfolio to achieve a full range of excavators ranging from 1.5t to 200t and loaders from 2t to 12t and, at the same time, Wang Bin said it would lay out global distribution channels, accelerate overseas market development, and expand market coverage and service and accessories capabilities.

Lovol’s managing director Mr. Wang Bin (right) with Construction Briefing editor Neil Gerrard (Image courtesy of Lovol)

“We will strengthen our overseas team building to support global business and establish our advantage as a regional centre company, progressively expanding into the global market,” he said.

XCMG’s chairman Yang Dongsheng said the company had benefitted from local partnerships with companies overseas as it attempted to familiarise itself with local markets. It took a majority stake in German concrete machinery manufacturer Schwing in 2012. “In the future, aside from Schwing as a manufacturer, we are also interested to look for partners like rental companies and service providers to co-operate with,” he said.

XCMG is set to open its first training centre in Europe, at its European headquarters in Düsseldorf, Germany, to upskill partners and customers in technical and after-sales support. In addition, it is launching its own financing services in the European market. Yang Dongsheng added that the company is considering further investment in the region as the brand continues to become better known.

What happens in North America amid US tariffs is less clear, however. “We did think about investing in local production in North America. But now we need to be realistic because there are a lot of uncertainties. We are not going to invest heavily because the labour cost in North America is quite high and, secondly, the supply chain there is not so mature or competitive,” he said.

Technological innnovations and new energy sources

Lovol arrived at Bauma with a range of upgraded products designed to meet the needs of European customers, including machines from its range of micro excavators with tailless slewing and boom side shift functions, which meet Euro V emissions standards.

Lovol’s Stave V-compliant FR36F-u Intelligent Excavator debuted at Bauma 2025 (Image: Neil Gerrard)

But the company also has a “significant strategic focus” on new energy products, according to Wang Bin. It is currently developing larger battery electric and cable electric excavators, as well as recently launching a number of battery-electric and hybrid loaders. The company also manufactures off-highway mining trucks ranging from 90t to 160t using internal combustion engines, extended-range hybrid, and battery electric technology.

“In the future, Lovol Heavy Industry will also launch more new energy excavators, loaders and unmanned mining trucks,” said Wang Bin. He added that he expected the purchase cost of electric equipment to gradually decrease in relation to diesel combustion engine machines. “On the one hand, the cost of batteries continues to decline and on the other, Weichai Battery Factory provides support for Lovol electric products, aiding Lovol in reducing production costs.”

The company is also building what it calls its ‘Lighthouse Factory’, which will introduce robots and artificial intelligence to the production process for enhanced efficiency and improved product quality.

Meanwhile, Zoomlion’s co-president Luo Kai acknowledged that adoption of electric construction equipment outside of China has remained low but believes it will progress at different speeds according to machine type and geographical region.

“Electrification rates will vary across product types: loaders, mixers and access platforms will see the fastest growth, while mobile cranes will show differentiated growth by type. Electrification will also vary by region, with rapid adoption in places like Singapore, Hong Kong and Europe. As battery tech improves in the automotive sector, construction machinery will follow, leading to a period of rapid growth.”

For its part, 40% of the products XCMG showcased at Bauma 2025 featured new energy technologies, including the XZ450E-R horizontal directional drill, which boosts steering speed by 200% by reducing slurry consumption by 60% and what it claimed is the first hybrid all-terrain crane developed for Europe, the XCA60_EV. Meanwhile, its next-generation Xrea Global Telematics Platform, integrating IoT, big data, cloud computing, and AI to enable seamless cross-border fleet management.

Asked what his ambitions were for the company by the time the next Bauma rolls around in 2028, XCMG’s Yang Donsheng replied with a laugh, “My first aim is to get a bigger booth! It is a pity that we cannot show a lot of new products and new technology. Our next goal would be something like 10,000 sq m because at Bauma China, our booth was 13,000 sq m.”

If that’s not a sign of Chinese manufacturers’ continued bullishness when it comes to exports, then what is?