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Chinese exporters accuse Trump of not playing by the rules

Chinese export companies have strongly criticized President Donald Trump for deciding to increase tariffs on imports into the US by another 10 percent, bringing them up to 25 percent for hundreds of billions of dollars’ worth of manufactured goods.

Comments reported by the South China Morning Post say Chinese exporters are decrying Trump as a business “killer” who “never plays by the rules”.

One exporter, Liao Yu, who produces bags and suitcases, said: “A 25 per cent [tariff] will kill everyone.”

Yu suggested that manufacturers who sell mainly to Europe and the US will be affected badly, unless they can relocate out of China, which is not possible for most of them.

Another exporter, Gloria Luo, who works for a manufacturer of automotive parts and industrial moulds, said: “Trump never plays by the rules and no one from China’s side is able to contend with him.”

The Chinese government has reportedly set aside $40 billion to help small business cope with the effect of the possible increases in tariffs, but has yet to respond directly to Trump’s decision.

Trump made his announcement through Twitter, saying: “$325 billion of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25 percent.”

It came amid the ongoing trade talks between the two world’s largest economies, with mixed hopes of achieving a deal which is acceptable by both sides.

So far, the effect of Trump’s tariffs on China have been a downward movement on Chinese stock markets, companies relocating out of China, orders for Chinese goods decreasing, and the possibility of increased unemployment.

The tariffs’ effects on the US, meanwhile, have been positive, according to Trump, who says they are “partially responsible for our great economic results”.

However, what’s being called a “trade war” between China and the US has been having effects on other parts of the world.

A number of companies are dropping Chinese suppliers in favour of Taiwanese suppliers.

Super Micro Computer, for example, has decided to avoid all Chinese components for its new equipment. The company is one of the world’s leading suppliers of servers.

One of Taiwan’s most famous entrepreneurs, Terry Gou, chairman of Foxconn, which has massive operations in China and is the main supplier for Apple, said the US seems to be creating its own, new supply chain in anticipation of a trade deal agreement.

But a trade deal seems a way off, especially as only today, the US accused China of reneging on trade promises, according to the Financial Times.

It’s not all doom and gloom, however, and not all companies are moving out of China. For example, BMW, the German automotive giant, is reported by Nikkei to be sticking with its decision to make China its export base for its electric cars, according to Nikkei.

China is the world’s largest automotive market, with a fast-growing electric vehicles sector, so BMW’s decision would seem to make sense.

For other companies, such as the large industrial robot makers such as Fanuc and ABB, the US-China trade dispute started having an effect as long ago as last year.

Fanuc, the world’s top industrial robot maker, said that its orders were down as a result, even though the company, like the others, is increasing their investment in China, building large, new facilities.

One illustration perhaps of the effect of the US-China trade friction is the dropping of the Port of Hing Kong in the global rankings. It was the busiest port in the world not very long ago, but is now fifth or even lower.

A report on American Shipper said the trade tension “could further hurt the port’s operations”, with many other ports in the region taking more of its business, partly because large manufacturing companies may are relocating there.

Main picture: Port of Hong Kong. Credit: Hong Kong Maritime and Port Board