Chinese high-tech manufacturers brace for impact of potential U.S. tariffs

Updated 2018-04-02 09:43:04 Xinhua

Like many senior managers of Chinese high-tech manufacturers, Xiao Fuqiang has been maintaining frequent contacts with his U.S. clients over the past week.

"I contacted my American clients one by one. We have been in close communication, hoping to find the best way out," said Xiao, vice general manager of Guangzhou China-Shine Electronic Co., Ltd., a manufacturer of action cameras.

The United States plans to slap tariffs on about 50 billion U.S. dollars of Chinese imports and restrict Chinese investment. The move has stoked fears of a trade war between the world's largest economies.

China's high-tech industries, such as electronic devices manufacturing, information technology, and new energy, might be the main target of Trump's tariffs plan, according to analysts.

Xiao said his American partners have shown willingness to brace for the potential impact and mitigate the risks together.

"We are both very important to each other," Xiao said. "Action cameras are mostly made in China and are in high demand on the U.S. market. Slapping tariffs on them will only lead to lose-lose situations."

Xiao's opinion is shared by Wu Tianwen, president of Dongguan Excel Industrial Co., Ltd., a manufacturer of consumer electronic products.

Over the past years, Wu's company has built a close partnership with its U.S. clients: They share the production costs, and 90 percent of Wu's products are exported internationally via his American partners.

Amid the threats of escalating trade disputes between China and the United States, neither Wu nor his partners want to see the cooperation end, Wu said.

"Years of partnership have produced an efficient mode of cooperation between us. We are very complementary and important to each other," Wu said. "That's why we are making every effort to find a way to minimize our losses."

In an email message, one of Wu's U.S. clients said that Trump's decision would in the end hurt American customers.

This has been the consensus among U.S. businesses. Some 45 U.S. trade associations, representing retail, technology, agriculture, and other consumer-product industries, have urged the U.S. administration not to move forward on its tariff plan on Chinese imports, as it would hurt U.S. consumers and companies.

Over the past week, many Chinese manufacturers also felt the pressure on the global industrial chain, which was brought about by fears of a trade war.

"The situation is hardly optimistic," said Tang Guobao, vice general manager of Guangzhou Risong Technology Co., Ltd., a producer of industrial robots.

China is a main manufacturer of industrial robots, but many precision instruments for these robots are produced by companies in the United States, the Republic of Korea, Japan, and European countries, Tang said.

"At least in the industrial robot business, there won't be bystanders, but only sufferers in a trade war," Tang added.

It is the same for iPhone's industrial chain. "'Made in China' is an important part of the smartphone industry. Behind it is a large network of global cooperation, division of labor, and profit-sharing, which also includes American companies," said the president of a big Chinese smartphone producer who declined to be named.

At a press conference on Thursday, Gao Feng, spokesperson for China's Ministry of Commerce, urged the United States to "come back to the right track of advocating win-win cooperation between the two countries."

"The United States must abandon unilateralism and protectionism, take measures, and resort to dialogue and consultation to settle disputes," Gao said.

"China is always open for negotiations," Gao added, emphasizing the principles of equality, constructiveness, and balance needed in joint efforts.

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