Chinese manufacturers and exporters are facing significant challenges due to rising U.S. tariffs. The Canton Expo, China's largest trade fair, revealed widespread disruption. Many exporters report halted orders from America and are actively seeking alternative revenue streams.
Foshan Zero Point Intelligent Electrical Appliance Co., Ltd., a mini-oven maker, has been severely impacted. Sales manager Steven Zhang stated that 90% of their products are sold in the U.S. Escalating tariffs have forced them to halt production and put workers on leave.
Guangdong Gales Electrical Appliance Co., Ltd., which produces blenders and juicers, has experienced similar disruptions. Sales manager Monica Liang reported that all U.S. customers have stopped placing orders. One customer even canceled an order of eight containers already en route to the U.S.
Jacky Jiang of Guangdong Kinwing Electric Industrial Co., Ltd., reported a surge of cancellations when U.S. tariffs reached 125%. Last year, the U.S. imported $438.9 billion worth of Chinese goods. China was the third-largest source of imported goods for the United States, following the European Union and Mexico.
Economists anticipate a significant impact on Chinese economic growth. Citi, Goldman Sachs, UBS, and Nomura have all lowered their GDP forecasts for China this year. The Chinese government is encouraging domestic demand and assisting companies in exploring local markets.
Some companies, like Tianjin-based bicycle manufacturer, are optimistic about diversifying into other markets. Manager Zhang Zhengang believes they can exploit the domestic, South American, European, and Russian markets. However, Monica Liang of Guangdong Gales Electrical Appliance Co., Ltd., noted that pivoting to the Chinese market could be challenging.
Kinwing is exploring various options, including expanding into non-U.S. markets and establishing overseas production facilities. They are considering countries like Mexico, Vietnam, and Indonesia as potential manufacturing bases. Zero Point is hoping for policy changes but is also considering opening production lines abroad.