Chinese firms find themselves in dire straits. Their products have been left to rot at port due to high tariffs the United States has placed on them, keeping them from American buyers. Even industry leaders, like tire manufacturers, have contended that the tariffs are extreme and unprecedented. Consequently, companies that rely on exports to the US market are now left with tremendous uncertainty.
At the Canton Fair in Guangzhou, the world’s longest-running import-export fair, several Chinese companies voiced their frustrations regarding the impact of these tariffs. This interactive day-long event is an essential opportunity for industry to share their trade priorities and challenges and engage directly with government officials. This year, the mood is intense with nervousness as businesses continue to deal with the fall-out from the trophy’s tariffs.
Laura Bicker, another BBC China correspondent, reported on the pandemonium leaving many businesses in a state of uncertainty. Tariffs are the bludgeon that has pushed Chinese goods into the too-expensive-to-purchase category for US buyers. As a consequence, an unprecedented backlog of products are currently sitting at Chinese ports.
“We’ve been hearing from several Chinese companies who’ve told us that their products are stuck in ports here, waiting to go to the United States. The tariffs are simply too high for US buyers to afford them.” – Laura Bicker
Because of this trade war standstill, companies are more worried than ever about their own future. The reality is that this story goes beyond hurting their current sales, but jeopardizing future business relationships and stability of their market. Bicker noted that “now we have a number of businesses in limbo,” emphasizing the urgency for resolution.
The harm caused by damagingly high tariff rates goes far beyond specific companies. It is a more pernicious threat to the entire economic playing field. Many Chinese firms depend on the US market for a substantial portion of their revenue. Inventory is languishing and potential homebuyers are not paying up or otherwise prepared to spend the new, elevated amount. One failure in an ecosystem can have important ripple effects.