Higher tariffs a body blow to small Chinese exportersBusiness | 10 May 2019 2:06 pm
Chinese exporters of all sorts of products, from power adapters and computers to vacuum cleaners, are anxiously hoping trade talks in Washington this week will yield a deal that might stave off higher U.S. tariffs on imports from China.
Amber Chen, sales manager for a vacuum cleaner manufacturer based in southern China, says her company has US$100 million in exports to the U.S. at stake.
“I really hope that the two countries can reach an agreement,” Chen said in a phone interview. “We just can’t swallow the costs of a tariff increase.”
Tariffs so far, have devastated many factories in Chinese coastal regions that serve the U.S. market. Industries such as electronics have seen sales to the U.S. plummet up to 40 percent. Overall Chinese exports to the U.S. dropped by 13 percent in April from a year earlier.
Many Chinese companies are reluctant to speak publicly about their problems, especially those linked to sensitive topics such as the ruling Communist Party’s policies on trade and technology.
But sales managers of five Chinese companies that depend heavily on exports to the U.S. told The Associated Press that while they have managed to adjust to current tariff levels with minimal trouble, a jump to a 25 percent tariff would make doing business with the U.S. virtually impossible for most of them.
“If the tariffs rise to 25 percent, then we’re done for,” said James, a sales manager for a computer monitor manufacturer in Shenzhen, China’s southern tech hub.
He declined to give his full name. He said 30 to 40 percent of his company’s products are exported to the U.S.
The impact of tariffs will be deeply felt by small- and medium-sized enterprises, said Shawn Yang, sales manager for a company in Shenzhen that produces electric power adapters. “We’re on the front lines,” he said.
Many of the company’s products are designed for use in the U.S., Yang said, so it would be difficult to shift sales to other markets.
He said he is confident it can weather the trade war because of the quality of their products, though some buyers are waiting for a conclusion to the trade dispute before placing new orders.
Yang said he has faith the two countries will reach an agreement.
″(The trade war’s) impact is too far-reaching,” he said. “It’s not possible for them to keep fighting like this.”