Will Trump’s tariffs on Chinese imports make the next Christmas more expensive for Americans?

The weather is overcast on the second day of the 124th session of the Canton Fair in Guangzhou -perhaps fitting for the massive trade show for Chinese exporters as global trade wars threaten the economic outlook.

But the place is packed, and the line to get in through the main entrance is massive. Thousands of companies are set up here this week to showcase their products with the hope that they might be able to pick up some new business while they catch up with their existing customers from all over the world.

Ningbo Staxx Material Handling Equipment, a manufacturer of pallet jacks, is experiencing a short-term boom as its customers try to get ahead of US tariffs, says Jeremy Chow, a sales manager at the company. It’s a good illustration of the front-loading of orders that analysts said explained the surprise acceleration in export growth in China’s September trade data.

The company exports manual, semi-electric, and fully electric pallet jacks to US customers. The fully electric models have been subject to a 25 per cent tariff since earlier this year as part of one of the initial rounds of duties the US imposed on imports from China.

So they’ve found a workaround: instead of shipping the fully electric models, they’re converting them to semi-electric ones by removing the motor. Then, when the US customer receives the product, it’s converted back. This adds about 10 per cent to the cost, and the semi-electric models are still subject to a 10 per cent tariff, but it’s still a bit cheaper to do it this way.

The opportunity for such arbitrage will go away next year when the 10 per cent tariff rises to 25 per cent. But Thomas Wang, the company’s exports director, isn’t too worried about a slowdown in sales, given how cost-competitive he thinks the company’s products are, even taking the tariffs into account.