A major China trade fair – the first such event to take place since President Trump’s tariffs took effect – served as a wake-up call for exporters, who warned the US market is totally “frozen.”
Businesses at the Canton Fair, China’s largest trade expo, which is held biannually in the southern city of Guangzhou, said they’re looking for ways to move into other markets, since US orders have dwindled drastically since Trump slapped the nation’s goods with a 145% tariff.
More than 30,000 exhibitors gathered to showcase their products at the fair, covering a space larger than 200 football fields, according to a Reuters report. At the previous Canton Fair, sellers and buyers clinched deals totaling $25 billion, according to local media.
But Trump’s import taxes loomed over the event this year, presenting a serious threat to the Chinese economy – the second-largest in the world, which relies heavily on its trillion-dollar trade surplus.
Kobe Huang, who attended the fair as a sales representative for Shenzhen Landun Environmental Technology, which makes water filters and smart toilets, said European sales for the business are up for the time being, but the crucial US market is “frozen.”
Customers have not canceled orders yet, but they’re pleading with Chinese exporters and producers to extend their order deadlines.
China is responsible for sales of more than $400 billion worth of goods to the US each year, a staggering figure to which no other trade partner comes close.
Its trade deficit with the US reached $295.4 billion last year – up $16.3 billion from the year before, according to the US Trade Representative.
While Trump announced harsh tax rates on many other nations earlier this month, he has temporarily lowered them for a 90-day pause, imposing a 10% across-the-board tariff in the meantime on all countries except China.
The situation is dire for Chinese businesses that rely heavily on US purchases.
“It’s a matter of life and death because 60 to 70% of our business is with American clients,” said Candice Li, marketing manager at Conmo Electronic Co, which sells medical devices.
“Goods cannot be exported and money cannot be collected. This is very severe,” Li told Reuters.
Li said her firm cannot just find new markets overnight, an issue that has similarly plagued many small businesses in the US.
Many companies rely on specialized manufacturing for their products, so it’s not plausible to switch facilities at a moment’s notice.
Other countries could still stand to get hit with hefty tariffs from Trump after the 90-day pause, as well, so a production shift away from China may prove fruitless.
Meanwhile, many facilities in alternative countries, like Vietnam for example, are reportedly overwhelmed with the spike in demand and have been turning away customers.
“I worry that if the situation remains deadlocked, and neither side gives in, the ones who will ultimately suffer are the ordinary people,” said Li, adding that Conmo might soon have to slash working hours and staffers.
“How will their salaries be paid? There will be unemployment,” Li told Reuters.
David Du, sales manager at Zealot, which makes speakers, said an order from Skechers for 30,000 speakers to be distributed across their US stores had to be paused after Trump’s tariffs.
Now, he’s focused on other emerging markets, like Nigeria – which is now twice as large a market for Zealot than the US.
Levy Spence, president of Air Esscentials, said he was at the fair to browse scented products, but didn’t have plans to purchase anything in particular because “every day I wake up, I feel like it’s a different tariff.”
“Prices are going to go up,” he told Reuters. “Even for the stuff that we source in the United States, a lot of the raw materials are sourced from around the world. It’s not just the China tariffs.”
About 170,000 overseas buyers had registered for the Canton Fair by April 8, down from a record attendance of 253,000 at the last fair, according to the trade fair organizers.
About 10% of the buyers were from the US and Europe this year, down from 20% last time.
The fair started Tuesday and lasts through May 5.
With Post wires
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