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The director of American companies, Kinu Kelly, came to the 137th China Import and Export Fair in Guangzhou this week with one goal: to find Chinese suppliers who could make the goods she needs outside the country.
“Now is imperative,” said the New York product development manager. “No exception.”
Kelly's eagerness to diversify his supply channels is a means for participants of the largest and oldest China fair – known as Canton Fair – adapts to a new reality for world trade after US President Donald Trump reported with samples from most Chinese goods up to 145% this month.
Made by Mao Zedong in 1957 to help the Communist country overcome an American commercial embargo, the canton fair twice a year has become China'S pre -eminent export fair, serving as a crucial link between the country's sprawling manufacturing base and its impatient customers around the world.
But the new steep samples of Trump – that China has met 125% prices Of itself – far exceeded what most exporters had considered a worst case before taking up their duties and threatened to conduct a decoupling between the two largest economies in the world.
In the corridors of the Canton Fair in Guangzhou, the American buyers and Chinese producers rushed to find new markets for their goods or their alternative commercial routes to avoid the priceWhile the warehouses filled with a lot of unwanted stock made newly unaffordable.
“Our prices for large supermarkets are already very, very low. We have no way of accepting such a high price,” said Ren Chaoqun, product manager at Xstrap, who produces car roof straps for us Customers including Walmart In a factory with more than 100 employees in the Chinese province of East Jiangsu.
REN and other suppliers have added that many products were adapted to specific American customers, which means that the search for customers in different markets could involve high regulatory obstacles or the removal of the brand image.
With few obvious solutions, Ren has expressed his hope that the two parties meet quickly to conclude an agreement. But neither is engaged in a calendar for talks.
Many 1.6 min SQ M fair exporters said the new samples have sold on the US market impossible.
“It's really difficult,” said Shen Senjian, sales director at Autoline, a manufacturer of household appliances based in the Jiangsu for recreational vehicles such as coffee makers, which makes a third of its sales in the United States.
“All our American customers have interrupted all their orders … The price is too high.”
“If they don't talk about it, we will have no other choice than to stop making the American market,” added Shen. “We cannot try to find more customers in Europe or in countries along the belt and the road (International International Infrastructure Initiative of President Xi Jinping).”
Another option is to move the production of China.
Many Chinese exporters began to extend their operations abroad after Trump imposed prices in the country in 2018 during his first mandate. Stands of the canton fair displayed the flags of Vietnam, Thailand and other countries of Southeast Asia in order to attract American buyers from the costs of a “Made in China” label.
Vera Li, sales specialist at Quanzhou Vition Gifts, a manufacturer of lighting and gifts with factories in Cambodia and the coastal province of Chinese Fujian, said that Trump's functions accelerate plans to move the balance between production to Southeast Asia.
The company factory in Cambodia already has regular staff of around 1,000 workers, compared to 800 on its Fujian site, and planned to develop with two new factories. The Fujian factory would gradually go to the orientation of manufacturing and design and research, she said.
But Trump’s threat of “reciprocal” prices on almost all American world trade partners – which he postponed for 90 days – meant that even exporters with overseas factories did not push relief sighs.
The “reciprocal” samples were based on commercial sales, which means that countries with major American surpluses such as low -cost manufacturers from Vietnam, Cambodia and Bangladesh could face 49%samples.
“We have not been affected so far, but in the future, we do not know, you must wait for politics,” said Nancy Yi, sales director at FlexTech Co, producing solar panels and energy storage units for the American market with two factories in the Chinese province of Hubei and Vietnam. “For the moment, there is no too clear solution.”
However, for American companies with products to find, finding Chinese companies that run factories in Southeast Asia could be the only option, said supply director John Chen.
“Our goal is to get the product outside of China, to manufacture and deliver it),” he said. “It's a priority.”
“(If) the United States also tariffs Vietnam, Cambodia, Thailand, Indonesia, (then) we have no choice” than paying them, “said Chen. He added that Trump's goal of pushing companies to reshape manufacturing in the United States was “impossible”.
“The supply chain does not exist.”
