By Casey Hall and David Kirton
SHANGHAI/GUANGZHOU (Reuters) -Amid the chaos of erratic U.S. tariff announcements, Chinese exporters making everything from kitchen appliances to Halloween decorations have responded by selling more goods to buyers in Europe, Latin America, the Middle East and Africa.
Jacky Ren, whose Gstar Electronics Appliance factory used to generate more than 60% of its revenue from U.S. orders, says he has “given up” on the American market.
Months of tit-for-tat tariff escalations, de-escalations, a brief truce, and the latest threat of a triple-digit tariff increase on Chinese goods from U.S. President Donald Trump in retaliation for Chinese curbs on rare earths exports, have left Ren feeling “extremely exhausted”, and he is seeking out new markets to offset lost orders from U.S. customers.
Ren is not alone. Chinese customs data released this week showed exports from the world’s second-largest economy have grown 7.1% to 19.95 trillion yuan ($2.80 trillion) in the first nine months of this year, despite a significant drop in goods heading to the United States.
This growth is expected to help China demonstrate the resilience of its economy in the face of geopolitical and trade upheaval when it announces third-quarter GDP data on Monday.
Still, Chinese exporters aren’t exactly happy with the situation, even though they have found new markets.
“In this environment, where global consumption [of our products] is not enough to replace U.S. demand, our order volume and revenue have plummeted by half,” said Lou Xiaobo, who makes Halloween decorations in eastern China and is in Brazil on a market research trip as he looks to sell more to Latin America.
As China’s entire export-oriented manufacturing sector has pivoted almost simultaneously, competition has eroded prices, making it more difficult for manufacturers to make ends meet.
“Losing access to the United States, which is the largest consumer market, is akin to the rail industry losing the locomotive,” Ren said, adding that it’s becoming increasingly common for exporters to sell at a loss.
“Every market is highly competitive … all we can do is hold on and wait for an opportunity.”
‘US BUYERS GAVE UP’
On Wednesday, the bustling opening day of the autumn edition of southern China’s Canton Fair in Guangzhou – the world’s largest trade show – all 15 companies Reuters spoke with said they had seen no U.S. buyers. Most noted an uptick in attendees from Brazil, Southeast Asia and Europe. All said they were prioritising market diversification.
“The situation’s too unstable. (Trump’s) like a child – crying one minute, laughing the next. You can’t play along with that,” said Cherry Yuan, overseas sales manager at Foshan Greenyellow Electric Technology, a maker of mosquito trapping equipment.
Cai Jing, who runs a travel mug company started by her mother and uncle in 1998 that recently started making personal blenders, said export manufacturers have little choice.
It hasn’t been the decision of Chinese exporters to abandon the U.S. market, Cai said.
“Sales to the U.S. have dropped a lot, by around half. It’s not that we’re giving up on the U.S. market. It’s that U.S. buyers gave up on us.”
($1 = 7.1232 yuan)
(Reporting by Casey Hall in Shanghai and David Kirton in Guangzhou; Editing by Tom Hogue)
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