The US-China trade war has reached a boiling point, with global businesses feeling the pinch as tariffs imposed by the US on Chinese goods have taken a heavy toll.
Executives at the world’s biggest trade fair in China, Canton Fair, were grappling with the reality of decoupling between the two economies. Many visitors to the event lamented the fate of their businesses, citing the devastating impact of the tariffs.
Paul McGrath, a New Jersey resident who imports fresh pet food from China, said his shipment arrived just as the 20% tariffs went into effect, adding $5,000 to his import bill. Now, he’s looking at multiples of that for any future shipments, forcing him to raise retail prices by a third.
The new tariffs have sparked a surge in cancellations and halts on US-bound shipments, with about 70% of one shipping company’s shipments being canceled or halted after the tariffs rose above 100%. However, Chinese firms are doubling down on investments in Southeast Asia to circumvent US controls.
Some companies, like Impulse Merchandisers, are shifting focus to securing deals with factories in Southeast Asia. Canadian firm Forno is also planning to move production of kitchen appliances from China to get around the tariffs.
Industry experts warn that the loss of this market could be catastrophic for some firms, and the fallout will likely spread to other countries. As Dan Wang, China director of the Eurasia Group, noted, “China’s future manufacturing capacity will not be in China; it’s going to be in other countries by investing in them now.”
Source: https://finance.yahoo.com/news/ground-zero-china-trade-boom-120000112.html