Asian factories on the front lines of Trump’s tariff

While the industrial forces in Asia are trying to avoid punishing the American definitions before Donald Trump’s deadline on July 9, exporters throughout the region are rushing to orders, lowering prices, looking for new customers and rethinking their relationship to the world’s largest economy.

Trump’s tariff is already based on 10 percent on countries that depend on exports to the United States for foreign growth, functions and transactions – and the high prices that the US President has pledged to impose unless he negotiates new trade deals that may be devastating.

The Financial Times Correspondents spoke to fabric producers, electronics manufacturers and car suppliers who are trying to understand the market in turmoil.

Buy a pair of Nike socks and there is a good opportunity to reach it from Interlooop, one of the largest fabric exporters in Pakistan. Interlooop sells approximately $ 220 million of goods to the United States every year, providing about 40 percent of Nike socks and a similar percentage of large retailers with a retail sign.

In the wake of Trump’s global tariff by 10 percent, Interlooop had to reduce target prices. A 29 percent targeted “The largest agent is destroyed.” “We have long -term loyal clients and I think it will remain for 12 to 18 months, even with 29 percent of the tariff,” said Zolkarin. “But further, I am very worried.”

How much this production remains in Pakistan depends on the deal that Trump shocked, not only by Islamabad, but also Competitive clothes producersLike Bangladesh and Vietnam. If it ends with tariffs in Bangladesh, Interlooop may revive a factory engraved on the ball. Interlooop, who also runs plants in China and Sri Lanka, has stolen plans to open a factory in Egypt, which faces a 10 percent tariff.

Meanwhile, research continues for new buyers in Europe, including Russia, but Zulqarnain fears “fierce competition” of Chinese producers, which have lower costs even after possible high definitions.

“If the demand decreases (due to customs tariffs), we can keep people who reside at home for two or three months.” “After that, we will have to start hairstyles.” Hamza Gilani in Islamabad

The demand was very impressive for the charming LED sounds, LED screens and lighting controls to the point that the Chinese company opened a sales office in Los Angeles in 2016 – the year in which Trump won for the first time.

Trump slapped the definitions of China in his first term. However, nearly a decade, this is China’s dominance of the supply chain in China – which represents 95 percent of the US imports of LED lights – carrying the upper hand with customers, said Wang Chenging, director of marketing at the LED magician.

“Basically, American consumers will push us. We are not the ones who are concerned,” he said, adding that competing manufacturing centers such as India lacks the infrastructure of competition, while the United States has not been able to produce similar goods. “Chinese products are good and cheap, so why do they go to other countries?”

Since Washington and Beijing agreed truce He said a 90 -day stand on an additional 145 percent tariff for Chinese exports, as many US agents have resumed shipping orders. While the initial deal stumbled, Trump said on June 11 that the total customs tariff for China would be 55 percent.

Wang customers’ orders for “free on the plane” are shipped from the departure ports, which means that customers are responsible for logistical services and customs tariff costs once goods are loaded on ships in Chinese ports. Some buyers were reported Cargoing their goods to third countries In order to hide their Chinese origin for the purposes of customs tariffs, a process known as washing the origin. “We only guarantee that (requests) reach the ports and leave the ports … after they arrive there, I don’t know what is happening to them.”

The witch sells its goods in 160 countries. In the end, Wang said, the United States will become “less and less important” for Chinese suppliers, who will focus on other markets, including Europe, Asia and in China.

“It was very important,” he said about the United States. “But (American definitions) will not affect us. It is just one part of the market. The United States does not represent the whole world.” Will Langley in Guangzhou

As a chips supplier for Samsung Electronics and Chinese smartphone makers, South Korea Dongwoon anatech It is correct in the intersection Trump’s commercial wars. Trump It threatens Apple and Samsung With 25 percent of the customs tariffs on their devices unless they turn production to the United States, while Chinese smartphones are also a large tariff.

Kim Dong Chaliol, CEO of the leading producer to install optimal images and automatic focus cards that prevent the camera and select the focus point to increase the quality of the image.

Kim said strict labor laws in South Korea make it difficult for expenses to fade. “There is a limit to reduce costs,” he said.

With this in mind, DongWoon wants to expand the Chinese market, where smart phone customers often sell goods locally, or in Southeast Asia and Europe. Kim said that although she has competitors in China, Dongwoon has been established long ago and is still a step forward, both with regard to design and customer service.

There is still pressure on price discounts, not only from Samsung, most likely, will follow the example of its customers in cars, Hyundai Motor and its affiliated KIA. Once again, he sees the way forward as it strengthens sales for companies and countries less exposed to the American tariff. Jung-a song

The Vuong Shane Holding coffee producer had a shipment of organic beans and coffee from the middle heights in Vietnam on its way to the United States on the day that Trump slapped a 46 percent tariff for the country’s exports. For fear of canceling by her American agent, Vuong Thanh Chong presented huge discounts and took a loss.

In recent years, there are more and more manufacturers, for fear of export restrictions and definitions, Go to Vietnam As part of the growing “China One Plus” strategy for re -drawing global supply chains. However, Vietnam is also a large product of commodity, the second largest coffee source in the world after Brazil. The United States represents nearly half of the Vuong Thanh Chong.

CEO Ngawin van Hyeb expects that the coming months will include more than the same – which provides discounts for American buyers to maintain access to the United States market. In the long run, he hopes that their presence in America will help them get exposure and access to other markets.

“We have decided to accept some losses in the United States market and use our access to the United States market as evidence of quality to reach other markets,” Hiep said. The losses may also be short -term. “If Democrats or other people enter power in the United States, this may change.”

However, the 46 percent tax – if it holds it – will lead to a 15 percent decrease in the company’s monthly profits. In the end, it makes sense to look at another place. “In the future, the American market will be an important market, but it is not the only market.” A.Anantha Lakshmi

Through factories in 15 countries, the Japanese car resource NOK tried to facilitate customers’ work to negotiate the definitions and supply chain disorders by providing them with an option, even to the extent that a list of options.

“Since our competitors who do not have an American base should be issued from places such as Japan, Mexico, Canada or China, we have started communicating with our customers that we can provide them from inside the United States – and because of this, there is an opportunity to rise our sizes,” said CEO Massao Tsuru.

However, car companies must go through long approval operations for new parts that mean that they cannot change their suppliers easily or quickly.

Its global network of factories is a advantage for NOK, as well as the fact that it is unusually among Japanese car suppliers, it has not linked its wealth to one local car product and instead it has European, American and Chinese agents. Analysts, including Bernstein, say that Japanese car producers can be among the worst through customs tariffs, which have an area of ​​25 percent for automatic relevant commodities and 24 percent on other elements.

NOK’s future may lie outside Japan, but also more than ever outside the United States. Her plan – in addition to diversification to heavy machines, and semiconductor parts – are the development of her business with Chinese EV makers. TSURU is also going to search for acquisitions, especially suppliers who have struck the definitions whose products can be combined into the American supply chain or help accelerate its axis away from cars. Harry Dempsey