According to the New York Times, Trump’s tightening trade policy on China has caused chaos for millions of small and medium-sized enterprises in the United States. Because American sellers have always been extremely dependent on the Chinese supply chain, which is efficient and low-cost.
Nearly 100 American sellers who import goods from China mentioned to the New York Times the negative impact of Trump’s tariff policy on them. These sellers are engaged in greeting cards, board games, outdoor shoes, hangers, digital photo frames, coffee equipment, toys and other industries.
These American sellers said that the tariff costs are not ultimately borne by Chinese suppliers. In the end, they must increase the price of their products to offset this cost.
Can we avoid importing from China?
They said it is impossible. At present, Trump has adopted new tariff policies on many countries with supply chain advantages. “And turning to domestic suppliers in the United States is usually not feasible, because domestic products are more expensive, of lower quality, and have fewer choices.” It is not known whether other countries will have new tariff plans in the future. “It is impossible to take the risk of moving production outside of China.”
Whether it is a finished product or a component that needs to be assembled, according to the calculations of these sellers, the cost of goods imported from China will increase by at least 10%.
And this may just be the beginning.
Trump has imposed several rounds of tariffs on Chinese imports, and also imposed tariffs on Mexico and Canada, both of which are important transit points for Chinese goods. In other words, the possibility of sellers trying to avoid this cost through other means is almost zero, and the road is blocked.
It is worth noting that Trump also said that these tariff changes are just “opening salvo”. During the campaign last year, he promised to impose tariffs of up to 60%. Not long ago, US government officials also proposed several times to impose fees on Chinese ships entering US ports, which means that the cost of shipping from China may also increase.
Amazon US sellers are worried: price increases will lose to Chinese sellers
Even if it is only a 10% tariff, it will be a heavy blow to JR because all its products are produced in China. Mainly silk robes, pajamas and nightgowns produced in China, JR’s sales channels are mainly self-operated websites and Amazon.
Company founders Bill and Juli said they are busy dealing with the cost increase caused by the new tariffs. In order to meet the seasonal demand for Christmas and Valentine’s Day, they had signed a large number of orders with Chinese suppliers before the tariffs came into effect, but now they are considering whether to postpone shipments, betting that the tariff policy will change.
But delays are also risky, and squeezing inventory for a long time will put great pressure on both Chinese suppliers and companies.
Eventually, the costs may have to be passed on to consumers. Bill said that a popular silk pajama set priced at $300 may increase in price by $15.
Other countries, such as Sri Lanka, India, South Korea and Thailand, also have silk production factories, so why work with Chinese factories?
“The best machines, the most professional technology, and the ability to produce high-quality products at preferential prices are all in China,” Bill said.
It is very difficult for local sellers to move the supply chain to the United States.
Chris, who has been selling outdoor and travel products for 18 years, has always cooperated with Chinese factories, but he still remembers the sting of tariffs during Trump’s first term, so he also tried to hand over the tableware such as camping knives and forks, which are the lowest threshold in the categories he sells, to American factories.
He sent emails to six related factories, but none of them responded, and there was no final conclusion on product specifications and prices.
“It sounds great to give American factories more opportunities through tariffs, but the premise is that they have such production capacity,” Chris said.
Chris is also considering factories in Thailand or Vietnam, but he said it is difficult to predict which countries the new tariff policy will target. “Suppose you spend so much time, energy and money to move production to another country, who can guarantee that Trump will not wake up one morning and say, ‘We are going to impose a 60% tariff on Vietnam, Cambodia, South Africa, or any other country’?”
It’s not that no one has moved the supply chain out of China.
Shawn, who sells home appliance repair parts, moved his own product suppliers that relied on imported steel and aluminum to Mexico, where he believed that the rising costs of the trade war with China would not be affected during Trump’s first term.
But now he faces the risk of double tariffs and can’t sleep at night.
Currently, Shawn’s Mexican suppliers are willing to bear a 5% cost increase. But the rest of the cost increase is still high, which has to be passed on to buyers.
Shawn calculated that a replacement oven part that originally sold for $23 could soon rise to $31. But if the price is raised too high, “I’m worried that my product will lose its competitiveness on Amazon, after all, there are too many Chinese sellers selling similar parts on the platform, and they have great product and quality advantages.”
At present, Trump has imposed two rounds of tariffs on Chinese imports, and it is still unknown whether there will be more in the future.
