Chinese exporters scramble to beat tariffs
BEIJING — Facing a possible U.S. tariff hike, one of China’s biggest ball bearing makers, Cixin Group, is weighing plans to rush shipments to American customers before the increase makes its sales unprofitable.
The company in the eastern city of Ningbo is among exporters of goods from motorcycle parts to electronics that are scrambling to cope with President Donald Trump’s higher duties by shipping early, raising prices or finding new markets.
The 25 percent increase would turn Cixin’s profits to losses in the U.S. market, which takes 30 percent of its exports, according to Wang Liqiang, a company manager.
“We are considering manufacturing as many ball bearings as possible for the U.S. market before the imposition of tariffs,” said Wang.
Some companies are looking at ways to hide their Chinese origin by shipping goods through other countries.
“Maybe customers will buy from South America, and then South America sells to the U.S.,” said Yvonne Yuan, a sales manager for Shenzhen Tianya Lighting Co., a manufacturer of LED bulbs.
Trump says higher duties on $50 billion of Chinese goods are meant to punish Beijing for stealing or pressuring foreign companies to hand over foreign technology. The plan targets goods
U.S. officials say benefit from improper Chinese policies including machinery, industrial components and aerospace, telecoms and other technology.
Trump left time to negotiate. A public comment period runs through May 11, with a hearing scheduled May 15.
Economists and Chinese officials say the tariffs’ overall impact on China should be limited. But for exporters that depend on the U.S. market, the potential costs are alarming.
A Moody’s Investors Service report said that Chinese manufacturers that supply inputs to targeted sectors would see reduced demand and more pricing pressure, spreading the effects of tariffs deeper into the Chinese economy. Manufacturing and processing of metals and metal products, as the key input sectors for technology-product manufacturing, would be hurt the most.
Chinese exporters supply most of the world’s mobile phones, personal computers, televisions, toys and other light manufactured goods. The United States buys about 20 percent of China’s exports, but Americans are especially important because they buy electronics and other high-value goods.