US trade war could hit Chinese suppliers harder

Orders have evaporated for Richard Chen, who manufactures Christmas decorations in southern China for US retailers, including Walmart and Costco, facing crippling US tariffs.

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“The orders are half of what they were last year,” said Chen, who is based in the manufac turing hub of Dongguan. “It’s now in survival mode. There’s no more scope to cut prices. But to get orders we sometimes have to take a price cut ... we have no choice,” Chen said, declining to elaborate on cuts he had agreed to. “We’re losing money.”

On February 15, US President Donald Trump applied new 10% tariff to the $300 billion worth of Chinese goods exported annually to the United States, with an additional 10% tariff announced on March 4 and further reciprocal tariffs expected on April 2. Chinese suppliers and their American clients are now coming to grips with the grim reality that this trade war will hit harder than in Trump’s first term in 2018, according to Reuters.