China’s exporters welcome trade war truce, but worry about long-term outlook

Manufacturers are still concerned for their business prospects despite Xi Jinping and Donald Trump agreeing to a pause on additional tariffs

Doubts remain about volatility of situation, with other duties still in place

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Manufacturers in China are anxious about the volatility of the situation and uncertainty over how solid the trade war truce is. Photo: Xinhua

Published: 9:00pm, 30 Jun 2019Updated: 9:34am, 1 Jul 2019

China-based manufacturers have welcomed the news of a truce in the year-long trade war between Washington and Beijing, with a freeze on further tariffs.

President Xi Jinping and his US counterpart Donald Trump confirmed the deal – reported earlier in the week – on the sidelines of the Group of 20 summit in Osaka on Saturday. The US will put on hold new duties on US$300 billion of Chinese goods, and the world’s two biggest economies will restart trade talks.

Trump also offered to ease restrictions on Chinese telecoms firm Huawei Technologies. In return, Beijing agreed to buy more US products to reduce the trade deficit.

But manufacturers were still concerned for their business prospects, given the volatility of the situation, uncertainty over how solid the truce was, and the fact that a 25 per cent tariff remained on US$250 billion of Chinese goods.

“It gives me hope that we can deliver these products without having to re-source,” said Timothy Stuart, director of Unit Bricks, a toymaker that exports 80 per cent of its products to the US.

The moratorium on tariffs means Stuart can continue to use his existing supply chain.

“Effectively, it keeps my business alive and keeps children educated,” he said.