World's biggest trade fair in China confronts effects of Trump tariffs

Executives at the world's biggest trade fair in China found themselves staring into the abyss as the seams of global commerce came apart.

- Bloomberg

BEIJING — Executives at the world's biggest trade fair in China found themselves staring into the abyss as the seams of global commerce came apart.

For many visitors to the Canton Fair, held in Guangzhou since 1957, shifting into reverse gear is hardly an option, even as prohibitive tariffs imposed on Chinese goods by the US make decoupling between the world's two biggest economies a reality.

Take Mr Paul McGrath, who lamented the fate of his business at the exhibition.

"This is just a disaster," he said.

For the past two years, the New Jersey resident had been planning to launch a fresh pet food maker in the US and saw the first shipment of 400 boxes leave China in January, the month when US President Donald Trump's tariffs threw global trade into chaos.

After the ship was held up at the Panama Canal on its way to Newark, Mr McGrath's shipment arrived a few days after the 20 percent tariffs—announced at the start of the new trade war by Mr Trump as punishment for fentanyl trafficking—went into effect, adding US$5,000 (S$6,600) to his import bill.

Now, he is looking at multiples of that for any future shipments, and responded by raising the retail price by a third to US$399 for his product, which is wholly made in China.

"We all knew tariffs were coming, but this is kind of ridiculous," Mr McGrath said, referring to a cumulative 145 percent in new duties now applied by the US on most imports from China.

The American presence was very thin on the ground as the trade fair got started on April 15.

The new tariffs were at the center of every conversation.