China exporters praying weaker yuan will save them from Donald Trump’s higher trade war tariffs
- For growing number of Chinese exporters, US tariff rates have reached their breaking point, meaning they expect to lose access to the American market
- Exporters in China’s manufacturing heartlands also express growing annoyance at US government and buyers, vowing to find new markets
Chinese exporters are praying for a continued depreciation of the yuan, hoping it will cushion the blow of the new round of tariffs to be implemented by the United States.
Many traditional exporters in China’s Pearl River Delta and Yangtze River Delta regions, the country’s manufacturing heartlands, say that the increase in US tariffs to 30 per cent will go beyond the limit of what they can afford.
“We were convinced that one of our long-term US clients, who is actually an intermediate trader for supermarket chains in the US, would order from us. But 300 container loads of goods have yet to be shipped, with a value of about US$5 million,” said a Chinese exporter of canned fruit, who wished not to be named.
“The US client called us last weekend and asked us to pay the additional tariff of 5 per cent. We could not refuse since it was our idea to bid to supply the canned fruit for the supermarkets,” she said. “We have no way to deal with it now. We only hope that the yuan will depreciate in the coming weeks and offset the new tariff. Otherwise, we will lose a lot [of money] on this order.”