In terms of the global trade environment, the resurgence of trade protectionism has introduced significant uncertainties to the semi-trailer export industry. Trade barriers erected by certain countries have increased the difficulty of exporting our products. The hike in tariffs has directly eroded the price competitiveness of our products in the international market. For instance, some regions have imposed stringent technical standards and certification requirements on imported semi-trailers. As a result, when entering these markets, we need to invest more time and capital to meet relevant regulations, which undoubtedly raises the company's operating costs.
Regarding market demand, the slowdown in global economic growth has led to a decrease in the expansion rate of the logistics and transportation industry, thereby suppressing the growth of demand for semi-trailers. However, it is worth noting that the advancement of infrastructure construction in emerging market countries, such as the active development of transportation and logistics networks by countries along the Belt and Road Initiative, has brought us new market opportunities. These countries have witnessed a rapid increase in demand for various transportation equipment. Especially in the field of road transportation, semi-trailers, as essential transportation tools, possess enormous market potential.
The changes in economic conditions also affect raw material costs and exchange rate fluctuations. The instability of raw material prices, such as the significant fluctuations in steel prices, poses a great challenge to our production cost control. Frequent exchange rate fluctuations, on the other hand, increase the exchange rate risks in foreign trade transactions. When the RMB appreciates, the price of our products denominated in US dollars relatively rises in the international market, which may lead to a decrease in orders. Conversely, when the RMB depreciates, although it is conducive to product exports, the cost of importing raw materials will increase accordingly.
In the face of these challenges, we are actively adjusting our strategies. In product research and development, we are increasing investment in the development of customized semi-trailers that meet the needs of emerging markets, enhancing the technical content and added value of our products to cope with trade barriers and market competition. In market expansion, we are paying more attention to the development of emerging markets. By participating in local industry exhibitions and establishing local sales teams, we can gain a deeper understanding of local market demands, improve brand awareness, and increase market share. Meanwhile, we use financial instruments to reasonably hedge against exchange rate risks and establish long-term and stable cooperative relationships with suppliers to jointly address fluctuations in raw material prices.
Despite the complex and ever-changing current economic situation, we firmly believe that through precise market positioning, continuous technological innovation, and flexible business strategies, our semi-trailer manufacturing factory engaged in foreign trade will surely seize opportunities amidst challenges, achieve sustainable development, and shine more brightly in the international market.
