Before a possible US tariffs, one of the largest Chinese manufacturers of ball bearing, Group Cixin, is weighing plans peak supply for American customers to improve sales making it unprofitable.
Company in the Eastern city of Ningbo is among the exporters of products from motorcycle parts to electronics who are trying to cope with the higher duties of the President of Donald trump shipping the beginning, to raise prices or searching for new markets.
25% increase to profit Cixin to suffer losses in the U.S. market, which covers 30% of its exports, according to Wang Liqiang, Manager of the company.
“We see manufacturing as much ball as possible bearings for the U.S. market before the imposition of rates,” said Wang. “We can do this by working overtime”.
Some companies are looking for ways to hide their Chinese origin for the delivery of goods through other countries.
“Maybe customers will buy from South America, and South America sells in the United States,” says Yvonne yuan, sales Manager at Shenzhen Tianya lighting Co., manufacturer of led bulbs.
Trump says that the increase in fees on $ 50 billion of Chinese goods are intended to punish Beijing for theft or pressured foreign companies to hand over foreign technology.
Routine tasks in goods, U.S. officials say, the benefit due to the wrong policy of China, including cars, industrial components, and aerospace, telecommunications and other equipment.
Trump has no time to negotiate. The public comment period runs through may 11, with a hearing scheduled may 15.
Economists and Chinese officials said that overall the impact the increased tariff on China should be limited. But for exporters dependent on the U.S. market, the potential costs are troubling.
Indirect effects can significantly increase returns, investors, researchers Moody’s service said in a report. He said Chinese manufacturers who supply materials for the target sectors will see a decline in demand and pricing pressure, the spreading of the influence of tariffs deeper into the Chinese economy. Production and processing of metals and metal products, as a key input sectors according to the technology of the product manufacturing, will be hurt the most.
Chinese exporters supply most of the mobile phones in the world, personal computers, televisions, toys and other light industrial products from thousands of factories.
They are flexible and resourceful, but many are struggling with high costs and slowing demand. The total volume of China’s exports last year increased by 7.9%, compared with the heady double-digit rates over the last decade.
The US buys about 20% of China’s exports. But Americans are especially important for exporters because they buy electronics and other valuable goods, including many focused on rates trump.
Some of the exporters have not yet recovered from the previous increase of US tariffs of up to 500% on washing machines, solar modules, and some metal products, designed to compensate for the fact that trump the administration says improper subsidies that will allow them to sell at unreasonably low prices.
Others believe that us customers can’t do without them.
Manufacturers of motorcycle components I plan to use this leverage to ask customers to share the costs if prices will rise, said pan Jianle, the official Association for motorcycle spare parts in Wenzhou. She said that they export worldwide, but the US is their market No. 1.
“USA motorcycle parts industry is heavily dependent on China,” said pan. “It’s hard for American consumers to find products with good ratio of price and quality from other places”.
This political conflict has left companies and local Chinese officials Jumpy.
Pan refused to provide the value of exports of components of motorcycle in the United States. A few hours later, foreign Affairs office of the Wenzhou city government have called up to ask about his interview.
Electronics manufacturers also plan to ask shoppers to share the higher costs, said Li Zengyou, Secretary of local production in the chamber of Commerce of Eastern part of the city of Zibo in Shandong province.
Last year, exports of electronic Zibo in the United States totaled $1 billion, according to Lee. This means if a rate increase applies to all of their sales, it could add $250 million to the cost.
If the increase in tariffs punch, “they will raise the price,” said Lee. “If customers in the United States could not accept this, they would have stopped exports to the US and turn to explore other markets.”
Ningbo-based margin Cixin group in the United States account for about 10%, which will be destroyed by a 25 percent tariff increase, said Wang. The company also exports to Europe and Latin America.
“We can’t bear all the costs,” he said. “We can try to increase our exports to other countries, but it is not easy to establish long-term relationships with new clients.”
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Researcher P. Yu Bing in Beijing and AP business writer Kelvin Chan in Hong Kong contributed to this.
Sourse: abcnews.go.com
