Chinese suppliers of small and medium-sized enterprises (SMEs) in the city of Yiwu, the world’s largest wholesale market, do not seem deterred by the tariffs imposed by US President Donald Trump, according to a Reuters report.
Trump had threatened to impose a 60% tariff on Chinese imports during his presidential campaign, but the actual tariff was set at 10%. Additionally, the Republican Party had promised to abolish the duty-free threshold (known as the de-minimis rule) for small packages, which had been a loophole for small import volumes.
Zeng Hao, the owner of a toy store called Jinqi Wanju, told Reuters, “Even if they [the US] increase the tariff to 50%, it won’t affect us at all.” He explained that the products remained very profitable and the company could absorb a part of the tariff costs.
Chinese suppliers do not lack orders, assured Abby Jin, who buys goods in Yiwu on behalf of importers from the US, the Middle East and Australia. Jin pointed out that while manufacturers might be willing to make less profit, the additional costs would ultimately be borne by the end consumers in a country with high import tariffs and thus, the consequences of their economic policies would be felt.
Other interlocutors told Reuters that they had time to prepare for Trump’s tariffs and the impact would not be as severe as expected.
Just a week ago, the US imposed new tariffs on China. About 10 minutes after the tariffs took effect, Beijing announced its own tariffs on the US industry: a 10% tariff on oil and farm machinery and a 15% tariff on coal and liquefied natural gas (LNG). The Chinese tariffs will take effect on February 10.
According to Goldman Sachs’ calculations, the Chinese tariffs will affect US imports worth $14 billion, while Trump’s tariffs will affect Chinese goods worth $525 billion.
Beijing’s response is restrained, leaving room for negotiations, according to economic experts consulted by the Washington Post. The Chinese authorities will compile a list of US technology companies, which could be subject to antitrust investigations and other enforcement measures to exert influence on their management, which is close to Trump’s inner circle, as the Wall Street Journal has learned. The sources of the news magazine said that Beijing wants to “gather more cards” before the talks with the US.
China has already announced plans to launch an antitrust investigation against Google and Nvidia.