US orders from Chinese small businesses on hold

Laura Bicker

China correspondent

The BBC’s Laura Bicker: ”A number of businesses in limbo” in China, after US tariffs on imports

“Trump is a crazy man,” says Lionel Xu, who is surrounded by his company’s mosquito repellent kits – many were once best sellers in Walmart stores in the United States.

Now those products are sitting in boxes in a warehouse in China and will remain there unless President Donald Trump lifts his 145% tariffs on all Chinese goods bound for the US.

“This is so hard for us,” he adds.

Around half of all products made by his company Sorbo Technology are sold to the US.

It is a small company by Chinese standards and has around 400 workers in Zhejiang province. But they are not alone in feeling the pain of this economic war.

“We are worried. What if Trump doesn’t change his mind? That will be a dangerous thing for our factory,” says Mr Xu.

Nearby, Amy is helping to sell ice cream makers at her booth for the Guangdong Sailing Trade Company. Her key buyers, including Walmart, are also in the US.

“We have stopped production already,” she says. “All the products are in the warehouse.”

It was the same story at nearly every booth in the sprawling Canton Fair in the trading hub of Guangzhou.

When the BBC speaks to Mr Xu, he is getting ready to take some Australian buyers to lunch. They have come looking for a bargain and hope to drive down the price.

“We will see,” he says about the tariffs. He believes Trump will back down.

“Maybe it will get better in one or two months,” Mr Xu adds with his fingers crossed. Maybe, maybe…”

Rachel Yu/ BBC A man with a tan wearing a black and white short sleeve shirt with a satchel over his shoulder holds an item on display in a booth which has electronics on white shelves, and posters with information on a red background to the sideRachel Yu/ BBC

The US and China have both slapped high tariffs on each other

Last week, President Trump temporarily paused the vast majority of tariffs after global stock markets tumbled, and a sell-off in the US bond market.

But he kept the import levies targeted at Chinese goods being shipped to the US. Beijing responded by imposing its own 125% levies on American imports.

This has bewildered traders from more than 30,000 businesses who have come to the annual fair to show off their goods in several exhibition halls the size of 200 football pitches.

In the homeware section, firms displayed everything from washing machines to tumble dryers, electric toothbrushes to juicers and waffle makers. Buyers come from all over the world to see the products for themselves and make a deal.

But the cost of a food mixer or a vacuum cleaner from China with the added tariffs are now too high for most American firms to pass on the cost to their customers.

The world’s two largest economies have hit an impasse and Chinese goods meant for US households are piling up on factory floors.

The effects of this trade war will likely be felt in kitchens and living rooms across America, who will now have to buy these goods at higher prices.

China has maintained its defiant stance and has vowed to fight this trade war “until the end.”

It is a tone also used by some at the fair. Hy Vian, who was looking to buy some electric ovens for his firm, waved off the effects of tariffs.

“If they don’t want us to export – then let them wait. We already have a domestic market in China, we will give the best products to the Chinese first.”

Rachel Yu/ BBC Lionel Xu looks directly into the camera, wearing a polo t-shirt with his company logo on it and a purple lanyard around his neck. He stands in front of electronics on a white shelf with a wooden backgroundRachel Yu/ BBC

Lionel Xu says he is worried about what happens if Trump does not lift the tariffs on China

China does have a large population of 1.4 billion people and in theory this is a strong domestic market.

Chinese policymakers have also been trying to stimulate more growth in a sluggish economy by encouraging consumers to spend.

But it is not working. Many of the country’s middle classes have invested their savings in buying the family home, only to watch their house prices slump in the last four years. Now they want to save money – not spend it.

While China may be better placed to weather the storm than other countries, the reality is that it is still an export-driven economy. Last year, exports accounted for around half of the country’s economic growth.

China also remains the world’s factory – with Goldman Sachs estimating that around 10 to 20 million people in China may be working on US-bound exports alone.

Some of those workers are already feeling the pain.

Not far from the Canton Fair, there are warrens of workshops in Guangdong making clothes, shoes and bags. This is the manufacturing hub for companies such as Shein and Temu.

Each building houses several factories on several floors where workers will labour for 14 hours a day.

Xiqing Wang/ BBC A man works at a table in a leather  factory. He is wearing a brown tshirt and a red apron, with a fingerless white glove on his  right hand. He is surrounded by what appear to be white shoe soles, one of which he is holding in his non-gloved handXiqing Wang/ BBC

The BBC visited a workshop in a Guangzhou village, which has changed from being export-oriented to focussing on domestic markets

On a pavement near some shoe factories, a few workers were squatting down to chat and smoke.

“Things are not going well,” says one, who was unwilling to give his name. His friend urges him to stop talking. Discussing economic difficulties can be sensitive in China.

“We’ve had problems since the Covid pandemic, and now there’s this trade war. I used to be paid 300-400 yuan ($40-54) a day, and now I will be lucky if I get 100 yuan a day.”

The worker says it is difficult to find work these days. Others making shoes on the street also told us they only earned enough to live a basic life.

While some in China feel pride in their product, others feel the pain of increasing tariffs and wonder how this crisis will end.

China is facing the prospect of losing a trading partner which buys more than $400bn (£302bn) worth of goods each year, but the pain will also be felt on the other side, with economists warning that the US could be heading for a recession.

Xiqing Wang/ BBC People walk down a wide red carpet which runs in between stalls selling goods in a massive room. There are signs for different companies, most of which are illuminated. The closest one is for Turkiye, Turkish Home appliances Xiqing Wang/ BBC

Businesses at the Canton Fair in Guangzhou said they have stopped sending goods to the US

Adding to the uncertainty is President Trump, who is known for his brinkmanship. He has continued to push Beijing and China has refused to back down.

However, Beijing has said it will not add any more to the current 125% tariff rate on US goods. They could retaliate in other ways – but it offers the two sides some breathing room from a week that sparked an economic war.

There is reportedly little contact between Washington and Beijing and neither side appears willing to head to the negotiating table any time soon.

In the meantime, some companies at the Canton Fair are using the event to try to find new markets.

Amy hopes her ice cream makers will head in a new direction.

“We hope to open the new European market. Maybe Saudi Arabia – and of course Russia,” she adds.

Others believe there is still money to be made in China. Among them is Mei Kunyan, 40, who says he is earning around 10,000 yuan a month at his shoe firm which sells to Chinese customers. Many major shoe manufacturers have moved to Vietnam where labour costs are cheaper.

Mr Mei has also realised something that businesses around him are now discovering: “The Americas are too tricky.”

Source link

Visited 1 times, 1 visit(s) today

Related Article

Why Apple is stuck in tariff tussle

Why Apple is stuck in tariff tussle

Annabelle Liang Business reporter Getty Images To leave or not to leave? China, home to more than a billion consumers, is Apple’s second-largest market Every iPhone comes with a label which tells you it was designed in California. While the sleek rectangle that runs many of our lives is indeed designed in the United States,

Anxiety on US college campuses as foreign students deported

Anxiety on US college campuses as foreign students deported

Brandon Drenon and Robin Levinson-King BBC News, Washington DC and Boston BBC For the last few weeks, many foreign students living in the US have watched as a sequence of events has repeated itself on their social media feeds: plain-clothes agents appearing unannounced and hauling students off in unmarked cars to detention centres. Those taken

Hopes for Iran nuclear talks tempered by threats and mixed messages

Hopes for Iran nuclear talks tempered by threats and mixed messages

Parham Ghobadi BBC Persian EPA As Iran and the United States hold a second round of high-stakes nuclear talks in Rome, hopes for de-escalation are being tempered by mounting military threats and mixed messages. US President Donald Trump reminds Tehran nearly every day of its options: a deal or war. He has previously said Israel

Harvard–Trump row over antisemitism letter may have stemmed from a mistake: Report

Harvard–Trump row over antisemitism letter may have stemmed from a mistake: Report

A dramatic confrontation between Harvard University and the Trump administration over antisemitism policies may have stemmed from a mistaken letter, according to a New York Times report citing multiple sources familiar with the situation.Harvard received a letter on April 11 from the White House’s antisemitism task force, containing a series of demands about hiring, admissions,

Sen Van Hollen says deported man 'traumatised'

Sen Van Hollen says deported man ‘traumatised’

Kwasi Gyamfi Asiedu BBC News Watch: US senator Hollen says his ‘principle mission’ was to meet Ábrego García A Maryland man who the Trump administration mistakenly deported to El Salvador has been moved to a new prison, US Senator Chris Van Hollen has said. The Democratic senator was speaking after returning from El Salvador where

US Supreme Court halts deportation of Venezuelans under wartime law

US Supreme Court halts deportation of Venezuelans under wartime law

Reuters Venezuelans who the Trump administration says are gang members have been deported to the Terrorism Confinement Center in El Salvador The US Supreme Court has ordered the Trump administration to pause the deportation of accused Venezuelan gang members under an 18th-century wartime law. A civil liberties group is suing the administration over planned deportations

Trump ditched a 2015 nuclear pact between Iran and six powers during his first term in 2018 and reimposed crippling sanctions on Tehran.(File/AFP)

Iran, US to hold talks in Rome in bid to reach nuclear deal | World News

Iran and the United States will hold a new round of nuclear talks in Rome on Saturday to resolve their decades-long standoff over Tehran’s atomic aims, under the shadow of President Donald Trump‘s threat to unleash military action if diplomacy fails. Trump ditched a 2015 nuclear pact between Iran and six powers during his first

Demonstrators rally in a protest organized by the City of Cambridge calling on Harvard leadership to resist interference at the university by the federal government in Massachusetts, on April 12, 2025.(File/REUTERS)

Harvard vs Trump row was triggered by a ‘mistake’? What NYT report says | World News

Harvard, one of the US’ most prestigious higher education institutions, found itself in a dramatic standoff with the Trump administration after it received a letter last week detailing the latter’s demands on the changes it expects in the university. Demonstrators rally in a protest organized by the City of Cambridge calling on Harvard leadership to

US President Donald Trump during a swearing-in ceremony for Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, in the Oval Office of the White House in Washington, DC, US, on Friday, April 18, 2025. The Senate confirmed surgeon and TV star Mehmet Oz to lead the agency on April 3.(Bloomberg)

Trump’s Oval Office press briefing cut short after young girl faints | World News

A question-and-answer session with US President Donald Trump in the Oval Office was brought to an immediate halt on Friday (local time) after a young girl fainted, as per New York Post. US President Donald Trump during a swearing-in ceremony for Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, in the Oval

Russia jails 19-year-old activist for quoting Ukrainian poet, criticizing war

Russia jails 19-year-old activist for quoting Ukrainian poet, criticizing war

A court in St. Petersburg sentenced 19-year-old Darya Kozyreva to two years and eight months in a penal colony on April 18 for allegedly “discrediting” the Russian army, including by sticking a quote from a Ukrainian poem onto a monument. Kozyreva was arrested on Feb. 24, 2024, after she affixed a verse from Taras Shevchenko’s

US has preliminary plan to monitor ceasefire in Ukraine, WSJ reports

US has preliminary plan to monitor ceasefire in Ukraine, WSJ reports

The U.S. shared a draft concept for monitoring a potential ceasefire in Ukraine with European and Ukrainian officials in Paris, the Wall Street Journal (WSJ) reported on April 18, citing an unnamed Western official. The draft concept was reportedly shared during meetings in Paris on April 17, where European, Ukrainian, and U.S. officials gathered to

Trump Zelensky Putin

Trump Admin Prepared to Recognize Crimea as Russian Territory: Report

The Trump administration is poised to recognize Crimea as Russian territory as part of a broader peace deal to bring an end to the Russia-Ukraine war, Bloomberg reported Friday, citing people familiar with the matter. Newsweek reached out to the White House and State Department for comment via email on Friday. Why It Matters Russia

Forgotten Indian explorer who uncovered an ancient civilisation

Forgotten Indian explorer who uncovered an ancient civilisation

Cherylann Mollan BBC News, Mumbai Alamy Rakhaldas Banerjee is credited with making one of the most important discoveries in world history An Indian archaeologist, whose career was marked by brilliance and controversy, made one of the world’s greatest historical discoveries. Yet he remains largely forgotten today. In the early 1900s, Rakhaldas Banerjee (also spelled Banerji)

0
Would love your thoughts, please comment.x
()
x