US orders from Chinese small companies on maintain | EUROtoday

“Trump is a crazy man,” says Lionel Xu, who’s surrounded by his firm’s mosquito repellent kits – many have been as soon as greatest sellers in Walmart shops within the United States.

Now these merchandise are sitting in packing containers in a warehouse in China and can stay there except President Donald Trump lifts his 145% tariffs on all Chinese items certain for the US.

“This is so hard for us,” he provides.

Around half of all merchandise made by his firm Sorbo Technology are offered to the US.

It is a small firm by Chinese requirements and has round 400 staff in Zhejiang province. But they aren’t alone in feeling the ache of this financial struggle.

“We are worried. What if Trump doesn’t change his mind? That will be a dangerous thing for our factory,” says Mr Xu.

Nearby, Amy helps to promote ice cream makers at her sales space for the Guangdong Sailing Trade Company. Her key consumers, together with Walmart, are additionally within the US.

“We have stopped production already,” she says. “All the products are in the warehouse.”

It was the identical story at almost each sales space within the sprawling Canton Fair within the buying and selling hub of Guangzhou.

When the BBC speaks to Mr Xu, he’s on the brink of take some Australian consumers to lunch. They have come on the lookout for a discount and hope to drive down the value.

“We will see,” he says concerning the tariffs. He believes Trump will again down.

“Maybe it will get better in one or two months,” Mr Xu provides together with his fingers crossed. Maybe, perhaps…”

Last week, President Trump temporarily paused the vast majority of tariffs after global stock markets tumbled, and a sell-off in the US bond market.

But he kept the import levies targeted at Chinese goods being shipped to the US. Beijing responded by imposing its own 125% levies on American imports.

This has bewildered traders from more than 30,000 businesses who have come to the annual fair to show off their goods in several exhibition halls the size of 200 football pitches.

In the homeware section, firms displayed everything from washing machines to tumble dryers, electric toothbrushes to juicers and waffle makers. Buyers come from all over the world to see the products for themselves and make a deal.

But the cost of a food mixer or a vacuum cleaner from China with the added tariffs are now too high for most American firms to pass on the cost to their customers.

The world’s two largest economies have hit an impasse and Chinese goods meant for US households are piling up on factory floors.

The effects of this trade war will likely be felt in kitchens and living rooms across Americawho will now have to buy these goods at higher prices.

China has maintained its defiant stance and has vowed to fight this trade war “till the top.”

It is a tone also used by some at the fair. Hy Vian, who was looking to buy some electric ovens for his firm, waved off the effects of tariffs.

“If they do not need us to export – then allow them to wait. We have already got a home market in China, we are going to give the very best merchandise to the Chinese first.”

China does have a large population of 1.4 billion people and in theory this is a strong domestic market.

Chinese policymakers have also been trying to stimulate more growth in a sluggish economy by encouraging consumers to spend.

But it is not working. Many of the country’s middle classes have invested their savings in buying the family home, only to watch their house prices slump in the last four years. Now they want to save money – not spend it.

While China may be better placed to weather the storm than other countries, the reality is that it is still an export-driven economy. Last year, exports accounted for around half of the country’s economic growth.

China also remains the world’s factory – with Goldman Sachs estimating that around 10 to 20 million people in China may be working on US-bound exports alone.

Some of those workers are already feeling the pain.

Not far from the Canton Fair, there are warrens of workshops in Guangdong making clothes, shoes and bags. This is the manufacturing hub for companies such as Shein and Temu.

Each building houses several factories on several floors where workers will labour for 14 hours a day.

On a pavement near some shoe factories, a few workers were squatting down to chat and smoke.

“Things usually are not going properly,” says one, who was unwilling to give his name. His friend urges him to stop talking. Discussing economic difficulties can be sensitive in China.

“We’ve had issues because the Covid pandemic, and now there’s this commerce struggle. I was paid 300-400 yuan ($40-54) a day, and now I will likely be fortunate if I get 100 yuan a day.”

The worker says it is difficult to find work these days. Others making shoes on the street also told us they only earned enough to live a basic life.

While some in China feel pride in their product, others feel the pain of increasing tariffs and wonder how this crisis will end.

China is facing the prospect of losing a trading partner which buys more than $400bn (£302bn) worth of goods each year, but the pain will also be felt on the other sidewith economists warning that the US could be heading for a recession.

Adding to the uncertainty is President Trump, who is known for his brinkmanship. He has continued to push Beijing and China has refused to back down.

However, Beijing has said it will not add any more to the current 125% tariff rate on US goods. They could retaliate in other ways – but it offers the two sides some breathing room from a week that sparked an economic war.

There is reportedly little contact between Washington and Beijing and neither side appears willing to head to the negotiating table any time soon.

In the meantime, some companies at the Canton Fair are using the event to try to find new markets.

Amy hopes her ice cream makers will head in a new direction.

“We hope to open the brand new European market. Maybe Saudi Arabia – and naturally Russia,” she adds.

Others believe there is still money to be made in China. Among them is Mei Kunyan, 40, who says he is earning around 10,000 yuan a month at his shoe firm which sells to Chinese customers. Many major shoe manufacturers have moved to Vietnam where labour costs are cheaper.

Mr Mei has also realised something that businesses around him are now discovering: “The Americas are too difficult.”