u.s. trade war fears ripple through china's 'workshop of the world' - chinese appliance manufacturers
Dongguan, China (Reuters)-
Chau is the general manager of a Chinese factory that manufactures precision metal parts for the United States. S.
The client, also known as the "suggested" trade war, did not in any way affect his plans for the worst.
Unlike last year, when the United StatesS.
The protectionist warning issued by President Donald Trump is basically considered a bluff, and Zhou and other factory owners in China say the risks posed by the trade dispute are now more obvious.
As a result, they warned that there could be a wave of small factory closures, the transfer of some production from China, and the use of suspicious practices to avoid increased tariffs.
"Previously, we didn't think we were affected because we made very few metal parts," Zhou said in three of his films . "storey beige-coloured-
Factory in Dongguan. “(Now)
Everyone is talking about this war.
"Dongguan City is one of the main export hubs in the Pearl River Delta region of southern China.
The region, known as the "world factory", accounts for about a quarter of Chinese exports.
Hundreds of computers
Zhou pointed out that the control lathe around him was buzzing, and the slender aluminum, steel and brass rods were processed into complex parts.
Automotive Brake system for assembly in USAS. plants -
As an example of the product catching up with the storm.
Of the approximately 1,500 metal parts produced at the Chau plant, including the needle used to puncture coffee capsules for espresso machines, he said about 200 parts could be hit by the proposed US manufacturing plantS.
Tariffs affecting $50 billion (£35. 1 billion)
The value of Chinese goods.
"If they are going to impose a 25% tax on these things, we have a lot of counter-effects.
We have to take steps to keep ourselves alive, "Zhou said. His company, Tian Pu International, has been operating factories in China for more than 30 years.
Zhou said he is now considering setting up a warehouse in Malaysia, Vietnam or Thailand where he can re-ship the goods
He said it would set up a small factory in southeast Asian countries to avoid increasing tariffs altogether.
China's dependence on exports as an economic driver has declined over the past decade, with the proportion of total exports to GDP falling from 18% in 2017 to 35% in 2006, according to Credit Suisse research.
But on a more micro level, tariffs are at the heart of China's vast industrial supply chain, which will exacerbate the pain of already struggling factories.
Many people have been hit by currency appreciation, soaring wage costs and labor shortages as the younger generation evaded the life of the factory.
The Trump threat is a further disruption to many exporters and has also worsened market sentiment, although the full impact is unclear. “The U. S.
This is a huge market, and some companies, especially those that are less competitive, may be eliminated, "said Danny Ho, founder of Alpha lighting, A small LED manufacturer with 100 workers in Dongguan.
In an interview with six other Chinese manufacturers of LED lighting products, four are expected to close Chinese factories, especially those that produce more common products such as bulbs and LED panels.
Places like Dongguan are especially vulnerable because there are a large number of grittier industrial plants there.
Dongguan Economic Growth 8.
Last year's 1%, while strong, did not fully reflect its long-standing efforts to upgrade its rusty factories and catch up with neighboring tech giant Shenzhen.
"If you are someone who doesn't have special technology or products, you will die," said Rose Qiu, director of Fangda Technology, Zhejiang, another LED manufacturer.
Jacky Patel, president of OM lighting, is a company that exports Chinese lighting products to the United States. S.
States, including Florida, said tariffs would be passed on to the United States. S. consumers.
"Customers will have to pay an extra £ 30 to £ 35%.
"They won't be happy, but we have no choice.
We just have to let it go.
All six LED manufacturers interviewed by Reuters also said they would pass on any additional charges to the USS. customers.
"We are thinking of moving our core market out of the US. S.
James Zhou, the boss of Poly long, said he has been operating an LED factory in Dongguan for 17 years.
"I am more concerned that the global economy is in recession under a trade war.
"China Manufacturing talks are in trouble. “Over in the U. S.
Now they dare not make new orders. . .
So everyone is just monitoring things and no one knows what's going to happen next, "said Zhou of precision metal parts factory. Under a so-
Called tariff coordination system
Chinese products are now specially coded so that the same products will face a higher US market. S.
If tariffs are used in higher places
Technology departments like nuclear power are not more common categories like household electronics.
A manufacturer who declined to be named said: "There is still a gray area . " He added that it is possible for some factories to forge these codes to avoid tariffs. He said some U. S.
The customer also proposed to ship the parts to Mexico to blur the origin.
This may be technically illegal.
More broadly, if retaliatory trade moves escalate, the U. S.
Tariffs on more mainstream goods such as home appliances, consumer electronics or toys will have a significant impact.
Ye Xiaoqing of the China Household Appliance Association told Reuters that only 5% of household appliances have been exported to the United States so far. S.
Affected by the proposed tariff hike.
"If they Tax household appliances, they will raise prices, which will affect American citizens. S.
Finally, "said Zhou, owner of Dongguan factory.
"Donald Trump does not want to do so.
He's got enough people there.