From children’s napkin to aluminum panels, Hong Kong companies are arrested in the scrap of the American -Chinese trade

Ite Sharon, Hong Kong’s employer, breathed a sigh of relief when he heard the news this week that the United States and China have moved to the abolition of their trade war and reduce the definitions of punishing them temporarily.

Under the agreement, the United States will temporarily reduce its tariffs on Chinese goods from 145 percent to 30 percent, while China will reduce its fees for American imports from 125 percent to 10 percent, and it is effective from Wednesday.

The 43 -year -old Israeli Canadian runs the consumer brand, which produces elements such as bamboo children’s calls and fertilizer diapers. Products were manufactured in factories in China, the mainland and sold on the Amazon in the United States and the United Kingdom

A shipment of 200,000 fertilizer bags is scheduled to reach a factory in Hanan County in China to Los Angeles Port on May 13, and Sharon was preparing to pay a tariff of 125 percent on the shipment. He is now hoped to pay a 30 percent tariff on Chinese imports, but he was not sure of the rate he would pay.

While he is “angry” from the low rate of customs tariffs, Sharon said he still has to transfer the additional cost to American consumers.

“I have no margins to accommodate,” he told CBC News.

The customs tariff cycle between the largest economy in the world has resulted in wandering in financial markets. It has also brought uncertainty to the US market -dependent companies, which do not know the definitions that will be within three months.

Some Hong Kong products have been axis of the manufacture of products elsewhere. Others, who depend on the large American market, continued to walk in the water while waiting to find out where the levels of definitions will happen in the end, amid concerns about the potential discounts of employees whenever the higher definitions remain in effect.

“You have to adapt or attract”

After Donald Trump’s first term in office, many Hong Kong companies opened factories outside the mainland of China to circumvent US definitions and hedging against the impact of geopolitical tensions. Companies are known as “China Plus One”, as their production lines are diversified on places such as Vietnam and Cambodia, which helped these countries appear as an industrial industry.

Exports to the United States contributed about 30 percent of GDP in Vietnam and 29 percent of GDP in Cambodia last year.

During his second term in office, President Donald Trump announced a 10 percent tariff for commercial partners in the United States and the so-called mutual fees of 46 percent in Vietnam and 49 percent on Cambodia-before the announcement of a 90-day stand on April 9.

Trump said his goal is to correct unfair commercial practices, on the pretext that many countries impose more tariffs on American goods than the United States on their duties, which creates a defect.

After Trump announced 145 percent import taxes on Chinese products last month, Sharon immediately booked a trip to the city of Hoshi Minh. After traveling to Vietnam regularly when he was working in the export field of his father for 15 years, he was aware of the country.

Sharon was in contact with a factory there since last year, where he has been looking at diversifying his supply chain, and decided to manufacture his bamboo tissues from there to wrap around the three -number tariffs.

The first shipment, which includes 20,000 bamboo bamboo, has been appointed next week.

Now that the customs tariff has been reduced to 30 percent on Chinese imports, Sharon said he would return to the manufacture of these products in a factory in the Zhejiang Province, China, which he used for three years.

Although the customs tariff rate was still above 10 percent in Vietnam, Sharon said that the manufacture of children’s napkins in China remained cheaper, as the factory provided him with more appropriate payment conditions.

He said that the lack of knowledge of the commercial policies that will happen next, and the transformation of production lines, was difficult.

“It is very difficult. You have to adapt, and if not adapted, you will get a cliff,” said Sharon.

Companies calculate the cost

Hong Kong Danny Lau, who runs the industrial pin, is watching the news two or three times a day looking for any signs of movement in the trade war between the world’s largest economists.

In response to a question about his ideas about Trump, Lao replied: “It is difficult to predict. This man is unexpected. He can do anything.”

Lao works, which were founded by his parents in 1960, have a factory in Dongguan, in China on the mainland, manufacturing aluminum -wrapped panels in Hong Kong and the main mainland of China.

The United States represents a third of the Kam Pin Industrial works – with its products on buildings for customers including Tech Amazon and Google giants.

President Trump increased the customs tariff for aluminum and imported steel to 25 percent. In addition to the existing fees of Trump’s first state, this had put the tariffs on its American products by about 75 percent.

Trump said that the temporary suspension of 90 days on the definitions of China does not include the sectoral tariff for cars, steel, aluminum and potential pharmaceutical preparations.

Lao said he was investigating to know the import tax rate for his products, and would contact customers in the United States to see if he had an opportunity to “obtain projects in the United States in the third and fourth quarters.

He expected 5 million US dollars from orders from the United States for the second half of the year, but US requests were reduced or suspended “so that the adult giants (the United States and China) could settle and reduce duty.”

“If we do not have sufficient orders, we must reduce the number of employees and contract our entire business, including using less space in our office and also production facilities.” “It is a bad feeling. It’s unexpected.”

Lao is looking forward to new markets, as in the Middle East, but he said it was difficult to replace the large American market, which took four years of it to storm it.

This week’s temporary trade truce gave him some hope. But he said that everything he could do was wait until there was a deal between the United States and China.

Lao said: “(The future view) is a little bright, but it is not completely sunny yet.” “We look forward to the sunny day.”

The uncertainty remains

With the passage of the hour on whether the United States and China could face a final deal, economist Simon Lee warned the issues that sparked trade war without solution – such as the US demands that Beijing give up the trafficking of chemicals used to make fentanel.

“The removal (tariff) is temporary,” Lee, who is studying at Hong Kong, China, said. “A clearer picture can be seen after the United States has finished deals with other countries. Definitions to China are still higher than before.”

With the decrease in customs tariffs, trade between the two largest economies in the world decreased, as Chinese exports to the United States decreased in April 21 percent on an annual basis, according to data issued by the Chinese Customs Authority on May 9.

Alan Murphy, CEO of the Marine Supply Series Research Company, according to anecdotal evidence of charging and cargo lines, said the sizes of China to the United States decreased between 30 to 50 percent, where reservations were canceled.

He said: “The tremendous collapse of exports from China, which we expected as a result of the definitions of 145 percent,, at least, was postponed.”

Murphy added that some goods will start moving now, but he did not expect a great recovery in the demand, as up to 30 percent of the customs tariff remained “somewhat punitive.”

Murphy said to the importers of us, the question was whether the definitions would decrease from 30 percent in 90 days – or rise. Nobody knows.

“It is the uncertainty here that kills everyone,” he said.