China’s exporters of Donald Trump wigs and American flags ‘had no idea’ they face higher trade war tariffs

On Tuesday, US President Donald Trump was greeted by the Louisiana Lieutenant Governor Billy Nungesser, who proudly brandished socks featuring the president’s face and distinctive hair.

The socks were manufactured by Gumball Poodle, a California-based company, whose website proudly states: “All our socks are proudly made in the USA.”

However, users of the Chinese e-commerce portal Alibaba can buy almost identical socks in bulk from Yiwu Hodeang E-Commerce, a Chinese manufacturer who said he ships thousands of pairs to the US each month.

When reached by telephone, a company manager, who would only give her surname as You, said “our sales to the US are going very well”. The Post did not establish any link between Gumball Poodle and Yiwu Hodeang E-Commerce. Alibaba is the owner of the South China Morning Post.

You also was not sure whether her products, which are tagged under the US customs code 6115.96.90, were included on the Office of the United States Trade Representative (USTR)’s List 4 group of tariffs, which will see 25 per cent tariffs placed on almost all Chinese goods that were not previously subjected to trade war duties.

However, nor did she seem too concerned. “At present we receive at least one big order from the US and several smaller orders each day,” You said.

“A big order equates to at least 5,000 pairs of the [Trump] socks.” The socks are priced at US$1.90 per pair.

In the product description, the company advertised that these Trump socks will “help continue the promise to Make America Great Again”. But You is not the only Chinese exporter of US nationalistic merchandise that will lose out from the latest escalation in the trade war.

Jack Chen is the CEO of Jiayi Party Festival Costume Company, a Hubei-based company that manufactures Donald Trump-themed wigs.

“Wigs (partial), false beards, eyebrows and the like, of synthetic textile materials” come under the tariff code 6704.19.00, meaning that should the tariffs enter force, US importers will have to pay 25 per cent more.

Chen sells 25 per cent of his company's total exports to the North American market. His wigs retail for US$1.35 to US$2.50, depending on the product, with a minimum order of 100 pieces.

He is not exactly sure how many go to the US, but given his inventory of Trump-related items, he imagines it is mostly America-bound.

Despite the trade war’s potential impact on his business, however, Chen, whose company also makes party sashes, plastic hats, beats and tiaras, is a strong supporter of Trump.

“I support him. Him being the US president is good for China over the long run,” he said.

These are not the first instances of a Chinese maker of Trump merchandise being burned by the trade war.

A textiles maker in the Chinese city of Shaoxing also had no idea that Trump is set to slap a 25 per cent tariff on their products.

However, this company has already seen the damage tariffs can do, even for those companies who thought they would profit from Trump’s election.

Since the first round of US tariffs on Chinese goods was introduced, Jiahao Arts & Crafts, which makes merchandise for the Trump 2020 re-election campaign, has seen an effect on its business.

Now it has not received any US orders for Trump re-election flags for the past month.

“I asked our US clients why they did not renew their orders. They said it was because the tariffs had greatly increased their cost,” said a manager at Jiahao, who would only give his surname as Yao.

He added that among his industrial peers in Shaoxing, demand for re-election flags had completely dried up.

Jiahao is about to get hit again. Among the thousands of items on the USTR’s List 4, which range from the arcane (edible meat offal of manatees and rosary beads) to the essential (smartphones and watches) is an item with the code 6307.90.98: “National flags and other made-up articles of textile materials.”

Sales of US national flags to American customers form an important part of Jiahao’s business – 40 per cent of total exports.

“If the tariffs are raised to 25 per cent, there will be a huge impact on us. We will not pay for any of the increased tariffs anyway but the US importers will pay it. I estimate our orders will be cut at least by half,” Yao said.

Yao does not know how to fill the void in exports, but as a manufacturer of Chinese flags and other international flags, he hopes to export more to Europe.

“China is the best market for US flags because of its high productivity and quality. Some Southeast Asian countries also make US flags, but they are not as good as China’s.

Around 60 per cent of US flags are imported from China, increasing tariffs does no good to Trump either,” Yao said.

Like Yao, many other exporters are eager to find out if their business will be affected by the incoming US tariffs, with some anxiously asking where a Chinese language translation of List 4 could be found. Worried vendors have taken to online forums.

“Does it mean I should give up my business? Almost all my orders are from the US,” a clothing exporter wrote on the FOB Business Forum, a Chinese discussion board that specifically focuses on foreign trade.

The latest tariff list also includes shirts, pyjamas, and underwear – the products this exporter makes.

“My business always had small profits but quick turnover, now the cost is likely to rise by 25 per cent,” the exporter lamented in the post.

On the same messaging board, an export freight forwarder with the surname Zhan said that all they could do was “pray for a peaceful end to the trade war”.