Chinese manufacturers must bite the tariffs bullet or think of long-term options to survive, says Seattle glove maker in Shanghai
- Prior tariff threats created a run on disposable gloves in 2018, spurring companies to add capacity, according to Fred Crosetto, the founder of Ammex Corporation, a Seattle company that makes gloves in Shanghai
- As new tariffs loom, some Chinese manufacturers are selling gloves at a discount
Chinese manufacturers who are subject to higher US import duties must either pass the added costs to their customers, or seek long-term solutions to work around the impact of the US-China trade war, said the founder of a Seattle glove maker who produces 10 per cent of his protective gear in China.
“We really have no other choice but to buy [those types of gloves] from China, because they are really only made in China, [where the production] probably won't shift for some time,” said the company’s founder and Chief Energising Officer Fred Crosetto. “So when the second wave [of tariffs] comes, we'll probably just have to bite the bullet. We'll just have to absorb that 25 per cent. Some of that we'll try and pass on to customers where we can.”
Crosetto’s comment underscores the bind that stymies manufacturers in China, including those foreign investors who base their production in the world’s most populous nation to take advantage of its abundant workforce, investor-friendly incentives, and vast supply chain.
To get ahead of the first batch of Trump’s tariffs that kicked in last year on US$200 billion of goods, Chinese exporters shipped their products abroad ahead of time, front loading their order books before higher duties kicked in. China’s March exports spiked, as shipments were boosted by 14.2 per cent from last year’s same month, creating a temporary crest compared with the 20.8 per cent decline during the Lunar New Year holiday in January and February.