Exporters in China’s manufacturing heartland brace for impact of US tariffs
Firms expecting to be hit directly by the duties may raise prices for American buyers, ship products via another country or even relocate their operations
Export-oriented businesses in China’s manufacturing heartland Guangdong say they are bracing for pain after the United States escalated trade tensions with the country.
With Washington due to start imposing 25 per cent tariffs on the first batch of Chinese products next week, some exporters are worried that it could erode their price advantage, and that orders from their US clients will dry up, according to manufacturers and analysts.
Those who will be hit directly by the duties are scrambling to find ways to manage the impact, including raising prices for US buyers, shipping products to another country before sending them to the US, and even relocating operations to other countries such as India, Vietnam and Mexico, they said.
US President Donald Trump on June 15 said the US would slap 25 per cent tariffs on US$50 billion worth of Chinese goods, with the first wave covering 818 products worth US$34 billion taking effect on July 6. China immediately retaliated, imposing 25 per cent duties on US$50 billion worth of US goods, saying its tariffs on a list of 545 US goods worth US$34 billion would also begin on July 6.
While China’s export machine as a whole should be able to absorb the blow since it will only affect a small proportion of shipments, the tariffs could be disastrous for individual companies that rely on the US market for survival.