From tariffs to package deliveries, unexpected policy declarations – and in some cases, near-immediate reversals – from US President Donald Trump are becoming an inescapable aspect of risk calculation for Chinese companies with links to the American market.
Only a few weeks into Trump’s second term, many businesses are already struggling to cope with the swift changes, including the brief suspension and resumption of accepting parcels from mainland China and Hong Kong – an order issued and rescinded in a matter of hours on Wednesday.
Though unpredictability appears to be a fact of life under the new US president, Chinese exporters and cross-border e-commerce sellers must be on constant alert as rapidly changing geopolitical circumstances can lead to sudden surges in cost.
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David Wang, who manufactures baking tools in Yiwu, Zhejiang province, said he planned to develop new products after the Lunar New Year and sell them through e-commerce platforms in the US.
“But given the current situation, it seems wiser to put those plans on hold for now,” he said, referring to the delivery stoppage.
If another moratorium is announced later, he said, “many cross-border e-commerce businesses will struggle.”
The US Postal Service’s shipment freeze followed Trump’s decision to impose a 10 per cent tariff on Chinese imports and remove the de minimis tax exemption, which had previously allowed duty-free shipments for items with cumulative value of less than US$800.
However, it rescinded the bulletin soon after, stating it was working with Customs and Border Protection to determine how the new tariffs can be collected while ensuring the “least disruption” to regular deliveries.
On Saturday, Trump imposed tariffs on goods from Mexico, Canada and China, citing the need to curb fentanyl trafficking and, in the case of Canada and Mexico, illegal immigration. He later suspended the tariffs on Mexico and Canada but proceeded with those on China.
In response, China filed a formal dispute with the World Trade Organization, the Geneva-based intergovernmental body confirmed on Wednesday.
Most factories primarily serving the US market anticipated Trump’s policies and are prepared, said a Ningbo-based exporter of textiles.
Some manufacturers have already established or laid the groundwork for backup operations in Southeast Asia or South Asia over the past few years, and now may be the time to activate them, said the man, who services the US and Europe but declined to be named.
“Their contingency planning involved setting up factories in Southeast Asia, though many of these facilities were not yet operational,” he said. “Now that the tariff policies are confirmed, they will need to put these factories into immediate operation – many of which were previously just empty shells.”
After the trade war began during Trump’s first term, many Chinese manufacturers relocated to Southeast Asia to bypass US tariffs.
The US president has threatened to impose a 20 per cent tariff on shipments from Southeast Asian nations to block goods made with components from China – though that rhetoric has not yet manifested as a material change in policy.
For smaller businesses, things may be even harder. Commenting on the volatile state of affairs, the owner of a Shenzhen-based e-commerce company said, there is “little for us to do” in advance.
“All we have is mental preparation,” said the woman, who ships smartphone accessories to US buyers in small parcels. “[Packages] delivered to the US under the de minimis exemption were cheap, and now they have to be priced higher, which in turn can dampen consumption.”
More from South China Morning Post:
- ‘De minimis’ exemption: US tariff move ‘will not kill’ Chinese e-commerce, analysts say
- How is China retaliating against US tariffs, and what impact will it have?
- Trump paused US tariffs on Mexico – what does it mean for Chinese companies there?
- Trump tariffs push gold prices to record high as investors seek safe haven
- China keeps yuan stable against US dollar: what it means for the trade war
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