Have Donald Trump’s tariffs cancelled Christmas? China sellers face order drought amid trade war

Chinese plastic Christmas trees and other festive decorations have reportedly been hit due to Donald Trump’s tariff, with producers saying that orders from US clients, which are crucial for their business and should have started to come in by now, are not coming in.

President Donald Trump’s punishing tariffs on countries around the world, including a 104 percent increase in duties on China, bear the fingerprint of Peter Navarro, a Harvard-trained economist who has long warned against a rising Beijing.(AFP FILE)

According to a Reuters report, US retailers source 87 per cent of Christmas decorations from China, with the imports worth roughly $4 billion. The Chinese factories making such products sell half of their products in the US market. So both are heavily dependent on each other for business.

“So far this year, none of my American customers have placed any orders,” Reuters quoted Qun Ying, who runs an artificial Christmas tree factory in the eastern city of Jinhua, as saying.

Asked if the delay is because of the tariff measures announced by US President Donald Trump, the factory owner said ‘of course’.

“Of course it’s about the tariffs. By mid-April, all the orders are normally finalised, but right now … it’s hard to know if any orders are coming. Maybe American customers won’t buy anything this year,” Ying said.

Donald Trump has raised tariffs on Chinese imports by 104 percent so far this year in an escalating trade war that threatens great pain for the world’s largest exporter of manufactured goods. Beijing has retaliated with 84 percent tariffs on all imports from the US.

If Americans want new Christmas decorations this year, they will have to pay a lot more for them – if they can find them on the shelves at all.

Some factory owners are trying to offset the impact by increasing sales in Russia, Europe, and Southeast Asia.

“We are worried that US orders will come down. We will definitely win this trade war,” Liu Song, a factory owner, told Reuters.

Experts have warned that the trade war will shave 1-2 percentage points off Chinese economic growth this year, exacerbate industrial overcapacity issues, threaten jobs, and further fuel deflationary forces.

As Chinese exporters sell less to the US, which last year bought goods worth more than $400 billion, they will have to compete ever more intensely on prices in other markets.

Can the US retailers source Christmas decorations from countries other than China?

Going by the statistics, sourcing the Christmas decorations from countries other than China will be difficult for retailers in the United States. The second-biggest exporter of these particular goods to the US is Cambodia, which makes up 5.5 percent of the demand. On top of that, the Donald Trump administration imposed a 49 percent tariff on Cambodian imports.

Trump’s other goal, shifting production to the US, is not feasible, says Jami Warner, executive director of the American Christmas Tree Association.

“They certainly can’t be made in the United States. There’s no manufacturing, the technology isn’t here, the labour market isn’t here,” Warner told Reuters.