Chinese manufacturers say they will speed up efforts to move production to other countries to bypass US tariffs after President Donald Trump announced a new trading offensive against the second largest economy in the world.
Beijing considers how retaliation against Trump decision on Saturday Store another 10 % tariff on Chinese exporter, with possibilities from counterattacks to export checks and depreciation of currency.
A relatively subdued initial reaction of the Chinese government, combined with Trump's ceasefire with Canada and Mexico On Monday and his plans for calling with Chinese President Xi Jinping, the hopes in Beijing supported that there could be room for negotiations.
But with the tariff, which will be reflected on Tuesday, companies in Southern South Heartlands said their strategies include moving some production to places, including the Middle East, handing over costs to US customers, and finding alternative markets.
“Many Chinese exporters, especially in the consumer product market, have lost some of its US market in the last few years, then Trump was stored as part of the trade war during his first term.
Lu said BrothersBox planned to move part of its production to the United Arab Emirates this year to focus on the US market. “We hope to get them back,” he said about his American customers.
TrumpDuring his election campaign, the threat of another 10 % of the Chinese goods tariff was increased – which attributed alleged inactivity in Beijing to the export of fentanyl to the US.
However, Chinese companies have diversified their business in recent years. According to the Rhodium Group, eight percentage points decreased last year.
Some Chinese production has moved to third countries where it is exported to the US. For example, the share of American imports from Vietnam and Mexico has increased significantly in the same period.
Lynn Song, China's chief economist in Ing, said the tariff would have a limited effect, because “many exports sensitive to the US price has already been redirected as a result of the first trade war”.
As Trump focuses on Mexico, Chinese companies would probably move more trade to Southeast Asia and Latin America, he said.
More sophisticated Chinese exports, such as machine parts, would also be difficult to replace, which means that American buyers would have to absorb prices.
Tony Cao of Foshan Nanhai Yingya Hardware Products, a company in the Chinese southern province of Guangdong, which makes about 5 percent of its sales in the US, said Trump's tariffs would hit US importers heavier than Chinese producers.
“He has to buy Chinese products,” Cao said. “Their custom costs will increase, and therefore their sales prices correspond appropriately.”
Some analysts said that the speed of promised tariffs was a challenge for Beijing and questioned how much more Chinese production capacity could be easily moved abroad.
“Anyone who could.” [move supply chains] He already has, ”said Cameron Johnson, a partner of Consultany Tidalwave Solutions. Land like VietnamWhere Chinese companies have set up production lines, tariffs could also be hit, he said.
“Anyone who has a significant trade surplus with the US will get some form of tariff,” Johnson said.
Amy Lin, a sales manager in the Chinese manufacturer of Teshuailong shoes, said foreign investments require more capital and labor than its company. Instead, Teshuailong would look for new customers in markets like the Middle East. “Life continues,” Lin said.
Beijing criticized Trump's new tariffs and threatened have a lawsuit The world business organization, but still has to announce retaliation.
Analysts have pointed to possibilities such as exports on rare countries – which are essential for a new energy industry – or antimonopoly investigation such as one recently announced Against the US Chip Company Nvidia.
Tidalwave Johnson said further measures may include further controls of drone exports and parts of electric vehicles to the US.
Most analysts believe Washington will store more tariffs, especially after the end of April, which Trump ordered in the Beijing store in 2019 during his first administration.
While Chinese imports of American agricultural products have increased slightly by this agreement, its purchases of American produced goods in 2020 and 2021 decreased because the pandemic caused confusion on global supply chains.
Meanwhile, some analysts believe that China's best strategy is quietly reduced by their own imports of targeted American products such as aircraft, agricultural products and medical devices.
This could damage the constituencies of powerful Republican politicians or industrial groups, such as farmers and oil and gas sector, while waiting for a chance to negotiate a new agreement.
“We do not raise the possibility to come with mutual tariffs.” [from China]But we think it will happen quietly, ”said Chris Beddor, representative of China's research director to avoid the attention of the President from Canada and Mexico and perhaps from the EU.
“Trump is clearly open at some point,” Beddor added, pointing to his postponement of a ban On Tiktoku, Chinese -controlled short video platform, and call last month with XI.
Economists have said that Trump's policy could eventually strengthen the Chinese economy by force Beijing to concentrate on difficult structural reforms, such as directing more resources on households rather than infrastructure and industry.
China reported a record -breaking overall Business surplus nearly $ 1 Last year, when the country relied on external demand to compensate for a weak domestic economy and the slowdown of the deep property sector.
“The irony of the first trade wars,” said Song of Ing, that it strengthened the Chinese efforts to “tech self -sufficiency”.
Others warned that the Chinese economy was now in a much weaker position. In 2018, the country was able to use depreciation of exchange courses, departure of trade, and reduce profitable exporters to alleviate tariffs, analysts in Barclays said.
“The above channels have decreased significantly, indicating a much greater impact on Chinese trade this time,” they said.
Visualization of Alan Smith Data and Haohsiang Ko
