It's going to affect us very badly

A container ship approaching a port in Qingdao in China's Shandong province on April 2. As tariff costs rise, one question traders have to grapple with is who that bill should land on. PHOTO: AFP

- Joyce ZK Lim China Correspondent Shannon Teoh Malaysia Bureau Chief Debarshi Dasgupta India Correspondent and Stania Puspawardhani

CHINESE TOY EXPORTER FEARS U.S. ORDERS WILL 'SHRIVEL UP'

Boxes of colourful toy tool sets that should have been bound for toddlers in the US sit unclaimed in Ms Cece Wong's Guangdong warehouse.

The rapidly spiralling tariff war, which has given some American importers pause about purchases from China, has left exporters like her in limbo.

When the US hiked duties on Chinese imports by 10 per cent in February and then doubled these in March, her American buyer held off on having the toys shipped in the hope that "maybe tariffs would come down" later on, she said.

But instead, that price tag is set to balloon, with levies to spike by another 34 per cent from April 9.

"Importers definitely have no way of accepting this," the 35-year-old sales director at Qinfeng Toys told The Sunday Times.

The tariff-induced limbo puts pressure on her company's storage space and finances, she said. It will not get paid until after the goods are shipped — and when that will happen is still an open question.

Qinfeng's factory churns out a swathe of playthings, from teddy bear baby mats to googly-eyed bath toys, in China's toy-making capital of Chenghai, Guangdong.

The toys are priced from 10 yuan to 40 yuan (S$1.90 to S$7.40) each at the factory.

Qinfeng is one of more than 50,000 toy companies located in the district in Shantou city. The industry employs about a third of the population there, local media reported in December.

As tariff costs rise, one question that traders have to grapple with is who that bill should land on.

One of Ms Wong's American buyers had in February asked that the tax be split evenly between them — a proposition she accepted.

When levies further increased in March, her customer was too embarrassed to propose any further cost-sharing and quickly proceeded with the shipment, she said.