As a president Donald Trump threatens to apply His first tariff track On Saturday in the world Chinese producers are preparing for influence.
Although Trump offers its biggest initial swing of Canada and Mexico With the proposed 25% tariff, the US president still has China on his radar. After reporting that the administration may delay at least some obligations until March 1, the White House said on Friday 10% Import tariffs from China on Saturday. On the campaign trail, he threatened with tariffs for Chinese goods of 60% or more.
Trump said that tariffs increase the production and development of employment, and at the beginning of his second term used threats Get the lever in political negotiations. Still, if Trump imposes fees, they can raise prices for American consumers for everything, from furniture to electronics.
In China, new duties can damage exporters who rely on the American market. During a recent journey to the production belt in the province of Guangdong, CNBC found factor owners preparing to threaten the tariff. Here are the three main ones:
Tariff threat is already raising prices for American consumers
Hoping to overcome the Trump tariffs, furniture seller, Harry Li, doubles the number of products that he sends to the USA and supplies them with warehouses.
He expects the strategy to force him to raise prices by as much as 10% – regardless of Trump's tariff.
He sells four out of five tables and other large furniture to American consumers.
“I have to overtake them in advance and take a greater risk,” said Foshan in his factory.
His company Tianyled plans to maintain additional supplies in the USA until Trump's tariff plan for China becomes clearer.
Chinese factories take on coping strategies
In addition to reserves, LI considers other ways to avoid border taxes.
“One of the things we can do is to choose these products, not on the tariff list and export them to the USA,” he said.
In the nearby industrial city of Guangzhou, the producer of water purifiers zheng yu searches the globe to find a new production base that provides the US outside China.
He plans to set up assembly lines in the third country, buying some equipment and components from China, employing locally for some jobs.
Zhenga Tesran is considering Vietnam, Malaysia and Mexico as production bases, but bends towards Dubai, despite the fact that the costs will be 30% higher than in China.
“The domestic market is too competitive. For some time we wanted to jump out, “he said. “Trump's tariffs gave us last emphasis.”
The founder of Tesran is already in contact with his American clients to discuss the division of tariffs. He hopes that his partners will accept at least half of the costs.
Chinese factories have a breakthrough – which can lead to less choice for American buyers
All CNBC companies talked that it took place where there is no point in selling American tariff thresholds from 20 to 60%and depended on the industry and the size of the company's margins.
The manufacturer of water purification Zheng said that another wild card is whether President Trump released proposed universal tariffs, which in his case will raise costs for Dubai.
“Then the United States is available,” he said.
In Guangzhou, Leng Rong, which produces skin care products, worries that he can completely stop exporting to the USA.
His goods were hit with tariffs north of 20% during Trump's first term and it caused great losses for his company, Keni.
Thanks to thin margins, Leng hopes that he will be able to transfer the cost of each tariff to his clients.
“In the past, we all thought that the American market was the largest market that everyone wanted to sell to. But with all uncertainty and unfriendly decisions, the United States is now less attractive, “said Leng in his Guangzhou factory. “It's really pity.”