In the past weekend, the US media reported that the US government will postpone punitive tariffs on imported products from China on the grounds that the American people have a good Christmas. CNN reported on the 17th that under the pressure of US retailers, the US presidential team warned last week that re-imposing tariffs on Chinese goods could “completely ruin Christmas.” President Trump said that tariff measures will be frozen by December 15 this year. Chinese expert Bai Ming said in an interview with the Global Times on the 18th that people’s livelihood supplies directly affect the lives of ordinary Americans. These people hold votes. For the sake of general elections, it is impossible for Trump to delay the tariff increase. In the short term, the United States cannot find a place to replace Chinese products on a global scale. The large-scale tariff increase on Chinese products will eventually lead to an increase in the cost of living for the American people, disrupting the normal operation of the global production chain, and making the United States lose more than its gains.
“Helping the American people to have a good Christmas”
CNBC reported on the 17th that Trump told reporters before flying to Pennsylvania recently that “in order to avoid tariffs may affect ordinary people, we postponed tariffs, so it has nothing to do with the Christmas shopping season.” Trump’s economic adviser Peter Navarro also said that Trump decided to postpone some tariffs, “so that we (Americans) have a Christmas without inflation and give the Fed more room to lower interest rates.”
The US “Washington Post” analysis said that under the influence of economic assessment and market reaction, Trump’s statement about tariffs on China is changing. His assistants also suggested that the president “take more moderate measures (responding to China). “. Trump’s policy of changing “to help the American people have a good Christmas” actually recognizes the fact that American consumers are paying for the trade war. Ryan Young, a researcher at the American Institute of Competitive Enterprises, said: “Deferring the decision to impose new tariffs on toys, smartphones, laptops and other popular Christmas goods made in China, the default is for (US) consumers to pay for customs duties. Instead of Chinese manufacturers. Recent predictions by the New York Federal Reserve economist indicate that the US tax increase will result in an average loss of $831 per American household per year, due to increased tariffs by importers, wholesalers, and retailers. The layer transfer is ultimately borne by the consumer.
Yiwu Merchants: Supply to the US on order
In terms of Christmas goods, the United States is particularly dependent on “Made in China”. According to statistics from the Peterson Institute for International Economics in the United States, more than 90% of the Christmas products imported from the United States, especially Christmas lights, Santa Claus fake beards, etc., are made in China. As the largest export port for small commodities in China, Yiwu exported more than 1.6 billion yuan of Christmas items last year, providing nearly 80% of the products for the global Christmas market. CNBC said that in addition to special Christmas items, consumer goods, including clothing, daily necessities and electronic products, which are popular during the US Christmas and New Year period, are mostly “Made in China.”
Zhejiang Yiwu Dongding Textile Co., Ltd. produces ribbon products of various colors for the bundling and packaging of various Christmas gifts. The company’s relevant person in charge, Mr. Huang, said in an interview with the Global Times on the 18th that the company and the US importer had signed orders for the US Christmas market a few months ago. “At present, whether the US raises tariffs will not affect the confirmed orders. At present, we are supplying the goods to the United States according to the order.” He told reporters that if the United States raises tariffs, the probability is that US importers raise the terminal price. Finally, let consumers pay the bill.
Mr. Huang said that the ribbons used for bundling Christmas gifts belong to textiles and have been catalogued in the United States in the early stages of tariff collection. “After more than a year, the import volume of US importers has dropped by about 30%, which has a certain impact on the company.” Mr. Huang said that he is currently working on developing markets outside the United States, such as Europe and the Middle East. Waiting for the region, but there is a process of tacit understanding with new customers.
The risks and costs of trade war
The British “Financial Times” commented that Trump’s trade war is facing “the risk of losing”, but the president can not publicly admit this, otherwise it will cast a huge shadow on the election next year. From 2018, the United States first imposed tariffs on China until the end of June 2019. US exports to China decreased by 33 billion U.S. dollars, while China’s trade surplus with the U.S. was further expanded. In the first seven months of 2019, China’s trade surplus with the United States was about $168 billion.
Mr. Huang said that the United States’ tariff increase has caused varying degrees of influence on Yiwu’s clothing and footwear industries. “I estimate that companies in these industries may shrink by 30% in the US market.” He told reporters that on the whole, the result of the increase of tariffs is that neither China nor the United States will benefit. Generally, everyone is not optimistic about the prospect of a trade agreement, stop or impose tariffs in China and the United States in the short term. “So the Sino-US trade war may exist for a long time, and we are also making long-term preparations.”
Bai Ming, deputy director of the International Market Research Department of the Research Institute of the Ministry of Commerce of the People’s Republic of China, believes that the large-scale imposition of tariffs on imported daily livelihood supplies by the United States will have an adverse impact on both China and the United States. Especially for the United States, either the US people are forced to swallow the bitter fruit of price increase, or the Chinese and American import and export enterprises are forced to seek entrepot trade to avoid tariffs. “This is undoubtedly a disturbance and damage to a huge industrial chain that has already formed in the world. People’s livelihood products seem to be simple and low-priced, but in fact, a large number of supporting enterprises still need to form a complete industrial system. Especially light industrial products have small batches, Multi-standard production requirements. Now, no country can replace China in a short time.”