Laura Bicker
Chinese correspondent
Laura Bicker of the BBC: “ a number of companies in limbo ” in China, after the American prices on imports
“Trump is a crazy man,” said Lionel Xu, who is surrounded by repulsive kits of his business mosquitoes – many were in the past sellers in Walmart stores in the United States.
Now these products are sitting in boxes in a warehouse in China and will remain there unless President Donald Trump raises his 145% prices on all Chinese products for the United States.
“It’s so difficult for us,” he adds.
About half of all the products manufactured by Sorbo technology in your business are sold in the United States.
It is a small business according to Chinese standards and has around 400 workers from the Province of Zhejiang. But they are not alone in feeling the pain of this economic war.
“We are worried. And if Trump does not change your mind? It will be a dangerous thing for our factory,” said Xu.
Nearby, Amy helps sell ice manufacturers on its stand for Guangdong Sailing Trade Company. Its key buyers, including Walmart, are also in the United States.
“We have already stopped production,” she said. “All products are in the warehouse.”
It was the same story at almost all the stands of the canton’s extended fair in the Guangzhou shopping center.
When the BBC speaks to Mr. Xu, he is about to take Australian buyers for lunch. They came in search of a good deal and hope to reduce the price.
“We will see,” he said about prices. He believes Trump will back up.
“Maybe that will be better in a month or two. Perhaps, perhaps,” adds Mr. Xu with his crossed fingers.
XIQING WANG / BBC
The United States and China both slap prices raised on each other
Last week, President Trump temporarily interrupted the vast majority of prices after the world’s stock markets have dropped and a sale on the American bond market.
But he kept the import samples for Chinese products sent to the United States. Beijing responded by imposing its own 125% samples on American imports.
This disturbed traders of more than 30,000 companies that came to the annual fair to show their goods in several exhibition rooms in the size of 200 football fields.
In the household items section, companies displayed everything, washing machines with dryers, electric toothbrushes to justice and waffles. Buyers come from around the world to see the products by themselves and conclude an agreement.
But the cost of a dietary mixer or a vacuum cleaner from China with additional prices is now too high for most American companies can transmit the cost to their customers.
The two largest economies in the world have reached a dead end and Chinese goods intended for American households accumulate on factory floors.
The effects of this trade war will probably be felt in kitchens and salons across America, which will now have to buy these products at higher prices.
China has maintained its provocative position and has promised to fight this trade war “until the end”.
It is also a tone used by some at the fair. Hy Vian, who sought to buy electric ovens for his business, signaled to the effects of prices.
“If they do not want us to export – then let them wait. We already have an internal market in China, we will first give the best products to the Chinese.”
XIQING WANG / BBC
Lionel Xu says that he and other members of Sorbo technology staff are concerned about what’s going on if Trump does not raise prices on China
China has a large population of 1.4 billion people and in theory, it is a solid domestic market.
Chinese decision -makers have also tried to stimulate greater growth in a slow economy by encouraging consumers to spend.
But it doesn’t work. Many middle classes in the country have invested their savings in the purchase of the family home, to look at the prices of their accommodation fall in the past four years. Now they want to save money – not spend it.
Although China is better placed to resist the storm than other countries, the reality is that it is always an economy focused on exports. Last year, exports represented about half of the country’s economic growth.
China also remains the world factory – Goldman Sachs believing that around 10 to 20 million people in China could only work on exports related to the United States.
XIQING WANG / BBC
The companies of the Canton Fair in Guangzhou said that they had stopped sending goods to the United States
Some of his workers already feel pain.
Not far from the Canton fair, there are workshop warrens in the Guangdong making clothes, shoes and bags. This is the manufacturing center for companies such as Shein and Temu.
Each building is home to several factors on several floors where workers work for 14 hours a day.
On a sidewalk near certain shoe factories, some workers cleared to discuss and smoke.
“Things are not doing well,” said one, who did not want to give his name. His friend urges him to stop talking. Discussing economic difficulties can be sensitive in China.
“We have had problems from the cocovated pandemic, and now there is this trade war. I was paid 300 to 400 yuan (40 to 54 $) per day, and now I am lucky if I get 100 yuan per day.”
XIQING WANG / BBC
The BBC visited a workshop in a village in Guangzhou, which has gone from export orientation to focus on domestic markets
The worker says it is difficult to find work these days. Other shoes in the street also told us that they had only won to live a basic life.
While some in China are proud of their product, others feel the pain of increasing prices and wondering how this crisis will end.
China is faced with the prospect of losing a trading partner who buys more than $ 400 billion (302 billion pounds sterling) of goods each year, but pain will also be felt on the other side, with economists warning that the United States could go to a recession.
Adding to uncertainty is President Trump, who is known for his breakup. He continued to push Beijing and China refused to retreat.
However, he said that he would no longer add to the rate of 125% current on American goods. They could retaliate by other means – but it offers both parties a certain week -long breathing room which sparked an economic war.
There would be few contacts between Washington and Beijing and none of the parties seem ready to go to the negotiation table so early.
In the meantime, some companies in the Canton Fair use the event to try to find new markets.
Amy hopes that its ice manufacturers will go in a new direction.
“We hope to open the new European market. Perhaps Saudi Arabia-and of course Russia,” she adds.
Others believe that there is still money to be made in China. Among them, Mei Kunyan, 40, who says he earns around 10,000 yuan per month in his shoe company that sells for Chinese customers. Many major shoe manufacturers have moved to Vietnam where labor costs are cheaper.
Mr. Mei also achieved something that companies around him now discover: “The Americas are too difficult.”
