October 23, 2024
GUANGZHOU – Chinese exporters at the country’s largest trade show say that American buyers and the business they represent have become increasingly elusive, as rising tariffs cast a pall on the outlook for shipments between the world’s two largest economies.
The twice-yearly Canton Fair, a bellwether for trade, opened on Oct 15 in Guangzhou, just weeks after the US implemented tariff hikes on Chinese imports from steel to electric vehicles on Sept 27.
It was the latest salvo in a trade war – with more duties to follow over the next two years – that has since 2018 reshaped the global flow of goods, with emerging economies filling the space left by decreased US-China trade.
Its effects were felt in the southern Chinese manufacturing hub, where exporters from across the country are converging until Nov 4 to secure orders for the months ahead.
Ms Jessie Zhou, sales representative at a shopping trolley manufacturer from eastern China’s Jiangsu province, said she had not encountered any American clients at the fair after tariffs on steel more than tripled to reach 25 per cent.
US buyers used to make up about 10 per cent of Changshu Kaijia Metal Products’ business, she said. Now, their orders were “basically no more”.
She was one of seven exporters who told The Straits Times on Oct 19 – as the first of the fair’s three phases wrapped up – that they had observed fewer Americans than before perusing wares that ranged from steel products to consumer electronics.
Ahead of the roll-out of tariffs, China’s exports to the US had grown every month since May, in year-on-year terms, to reach US$47 billion (S$62 billion) in September. The US, which ceded its position as China’s largest export market to Asean in 2023, reclaimed the top spot for the months of August and September 2024.
While no breakdown for the number of US attendees is available, local media reported that about 24,000 European and North American buyers visited the fair from Oct 15 to 19, up by 4.8 per cent from its last edition in the spring.
They made up 18.1 per cent of foreign importers at the fair – less than a third of the 69.7 per cent accounted for by countries involved in China’s Belt and Road Initiative, an infrastructure development strategy, many of which are emerging economies.
Mr Ben Huang, a sales manager at antenna maker Qiaohua (Guangdong) Technology, said he had received more buyers from Africa, Latin America and the Middle East, even as “not that many” US clients had shown up.
Echoing this observation at a booth nearby, Mr Alan Huang, who sells insect zappers mainly to American and European buyers, said he had seen greater interest from Middle Eastern visitors and had signed three on as customers.
Even so, he continues to target the US market – which remains attractive as the largest consumer market in the world – by tailoring products to consumers’ needs.
Americans still had demand for his goods, which were affordably priced between US$3 and US$40, he said. To date, they simply absorbed the cost of tariffs.
Goods being shipped from the Canton Fair in Guangzhou on Oct 19. PHOTO: THE STRAITS TIMES
Steel products manufacturer Hebei Minmetals also continues to set its sights on the US market, which makes up 60 per cent of its sales.
But it has had to do more to keep American buyers interested.
Tariff hikes had “forced” export-focused companies to build factories in third countries to circumvent taxes, said sales manager Robin Liang. His company plans to do so in Vietnam and Thailand, he added.
Even as conventional trade faces headwinds, e-commerce has emerged as a bustling channel for sellers to tout goods to the US.
Online platforms created by companies originating in China, such as Shein, Temu and TikTok Shop, have proven popular with American consumers – although the US is now moving to tighten a provision that allows duty-free imports of low-value packages bound directly for consumers.
The twice-yearly Canton Fair opened on Oct 15, just weeks after the US implemented tariff hikes on Chinese imports from steel to electric vehicles. PHOTO: THE STRAITS TIMES
A TikTok Shop investment promotion manager at the fair, who asked to be identified only as Leon due to company policy, said the platform’s sales in the US had grown “a lot” in 2024 compared with 2023, but declined to provide figures.
Many Chinese vendors were opting to sell to US customers via the platform, as Americans had higher purchasing power and could pay more for products, he said.
Just a day after the Canton Fair closes, the US will head to the polls on Nov 5 to vote for a new president – a decision that could further alter the landscape for Chinese trade, with Republican candidate Donald Trump pledging to levy tariffs of 60 per cent or higher on imports from China.
Summing up the views of many exporters who spoke to ST, Mr Huang, the seller of insect zappers, said: “We are not concerned with politics. As long as American clients continue to buy, we will continue to sell.”