"Trump is a crazy man," says Lionel Xu, who is surrounded by his company's mosquito repellent kits – many were once best sellers in Walmart stores in the United States. Now those products are sitting in boxes in a warehouse in China and will remain there unless President Donald Trump lifts his 145% tariffs on all Chinese goods bound for the US. "This is so hard for us," he adds. Around half of all products made by his company Sorbo Technology are sold to the US. It is a small company by Chinese standards and has around 400 workers in Zhejiang province. But they are not alone in feeling the pain of this economic war. "We are worried. What if Trump doesn't change his mind? That will be a dangerous thing for our factory," says Mr Xu. Nearby, Amy is helping to sell ice cream makers at her booth for the Guangdong Sailing Trade Company. Her key buyers, including Walmart, are also in the US. "We have stopped production already," she says. "All the products are in the warehouse." It was the same story at nearly every booth in the sprawling Canton Fair in the trading hub of Guangzhou. When the BBC speaks to Mr Xu, he is getting ready to take some Australian buyers to lunch. They have come looking for a bargain and hope to drive down the price. "We will see," he says about the tariffs. He believes Trump will back down. "Maybe it will get better in one or two months," Mr Xu adds with his fingers crossed. Maybe, maybe..." Last week,President Trump temporarily pausedthe vast majority of tariffs after global stock markets tumbled, and a sell-off in the US bond market. But he kept the import levies targeted at Chinese goods being shipped to the US. Beijing responded by imposing its own 125% levies on American imports. This has bewildered traders from more than 30,000 businesses who have come to the annual fair to show off their goods in several exhibition halls the size of 200 football pitches. In the homeware section, firms displayed everything from washing machines to tumble dryers, electric toothbrushes to juicers and waffle makers. Buyers come from all over the world to see the products for themselves and make a deal. But the cost of a food mixer or a vacuum cleaner from China with the added tariffs are now too high for most American firms to pass on the cost to their customers. The world's two largest economies have hit an impasse and Chinese goods meant for US households are piling up on factory floors. The effects of this trade war will likely be felt inkitchens and living rooms across America, who will now have to buy these goods at higher prices. China has maintained its defiant stance and has vowed to fight this trade war "until the end." It is a tone also used by some at the fair. Hy Vian, who was looking to buy some electric ovens for his firm, waved off the effects of tariffs. "If they don't want us to export – then let them wait. We already have a domestic market in China, we will give the best products to the Chinese first." China does have a large population of 1.4 billion people and in theory this is a strong domestic market. Chinese policymakers have also been trying tostimulate more growth in a sluggish economyby encouraging consumers to spend. But it is not working. Many of the country's middle classes have invested their savings in buying the family home, only to watch their house prices slump in the last four years. Now they want to save money – not spend it. While China may be better placed to weather the storm than other countries, the reality is that it is still an export-driven economy. Last year, exports accounted for around half of the country's economic growth. China also remains the world's factory – with Goldman Sachs estimating that around 10 to 20 million people in China may be working on US-bound exports alone. Some of those workers are already feeling the pain. Not far from the Canton Fair, there are warrens of workshops in Guangdong making clothes, shoes and bags. This is the manufacturing hub for companies such as Shein and Temu. Each building houses several factories on several floors where workers will labour for 14 hours a day. On a pavement near some shoe factories, a few workers were squatting down to chat and smoke. "Things are not going well," says one, who was unwilling to give his name. His friend urges him to stop talking. Discussing economic difficulties can be sensitive in China. "We've had problems since the Covid pandemic, and now there's this trade war. I used to be paid 300-400 yuan ($40-54) a day, and now I will be lucky if I get 100 yuan a day." The worker says it is difficult to find work these days. Others making shoes on the street also told us they only earned enough to live a basic life. While some in China feel pride in their product, others feel the pain of increasing tariffs and wonder how this crisis will end. China is facing the prospect of losing a trading partner which buys more than $400bn (£302bn) worth of goods each year, butthe pain will also be felt on the other side, with economists warning that the US could be heading for a recession. Adding to the uncertainty is President Trump, who is known for his brinkmanship. He has continued to push Beijing and China has refused to back down. However, Beijing has said it will not add any more to the current 125% tariff rate on US goods. They could retaliate in other ways – but it offers the two sides some breathing room from a week that sparked an economic war. There is reportedly little contact between Washington and Beijing and neither side appears willing to head to the negotiating table any time soon. In the meantime, some companies at the Canton Fair are using the event to try to find new markets. Amy hopes her ice cream makers will head in a new direction. "We hope to open the new European market. Maybe Saudi Arabia - and of course Russia," she adds. Others believe there is still money to be made in China. Among them is Mei Kunyan, 40, who says he is earning around 10,000 yuan a month at his shoe firm which sells to Chinese customers. Many major shoe manufacturers have moved to Vietnam where labour costs are cheaper. Mr Mei has also realised something that businesses around him are now discovering: "The Americans are too tricky."
'This is so hard': The Chinese small businesses brought to a standstill by Trump's tariffs
TruthLens AI Suggested Headline:
"Chinese Small Businesses Struggle Under Trump's Tariffs Amid Ongoing Trade War"
Bbc News
7.1
TruthLens AI Summary
The ongoing trade war between the United States and China has brought significant challenges to small businesses in China, particularly those reliant on exports to the US. Entrepreneurs like Lionel Xu from Sorbo Technology express deep concern over the steep tariffs imposed by President Trump, which currently stand at 145% for Chinese goods. This situation has resulted in a backlog of products, such as mosquito repellent kits and ice cream makers, which are now languishing in warehouses instead of reaching American consumers. The Canton Fair, a major trading event in Guangzhou, has seen exhibitors lamenting the impact of tariffs on their sales, with many forced to halt production altogether. Despite these challenges, some business owners remain hopeful that the situation may improve if negotiations resume and tariffs are lifted. However, the uncertainty surrounding the economic relationship between the two countries leaves many feeling anxious about the future of their businesses and livelihoods.
Moreover, the trade tensions have broader implications for the Chinese economy. While China has a vast domestic market, the current economic climate reveals that many consumers are hesitant to spend, having invested heavily in real estate and now facing declining property values. Workers in manufacturing hubs are already experiencing the fallout, with reports of reduced wages and job insecurity. The trade war threatens to exacerbate the situation, as the US is a critical market for Chinese exports, accounting for over $400 billion in trade annually. As companies explore alternative markets in Europe and the Middle East, the long-term effects of the tariffs and the overall economic slowdown remain uncertain. With little communication between Washington and Beijing, the prospects for resolution seem dim, leaving many small businesses in China to navigate a precarious economic landscape amidst rising tensions and shifting market dynamics.
TruthLens AI Analysis
The article highlights the significant impact of tariffs imposed by former President Trump on small Chinese businesses, showcasing their struggles and uncertainties in the midst of a trade war. By using personal stories from business owners, the narrative emphasizes the direct consequences of political decisions on everyday people, particularly in the context of international trade.
Impact on Small Businesses
The experiences of Lionel Xu and Amy illustrate the broader plight of many small Chinese companies that heavily rely on exports to the US. The staggering 145% tariffs have halted production and left many products unsold, leading to economic anxiety among business owners. This personal perspective creates an emotional connection with the audience, making the economic ramifications more relatable.
Political Context and Public Sentiment
The article hints at a critical view of Trump's policies, as expressed through Xu's description of him as a "crazy man." This choice of words aims to generate a negative sentiment towards the former president's trade strategies and suggests a longing for a resolution to the ongoing trade disputes. The uncertainty surrounding the tariffs also reflects a broader concern in the business community about the future of US-China relations.
Narrative of Hope Amidst Challenges
Despite the dire circumstances, there is a thread of optimism woven throughout the article, particularly in Xu's belief that the situation may improve soon. This reflects a common human tendency to hope for better days, even in tough times. However, it also serves to highlight the precariousness of their situation, as the future remains uncertain.
Comparative Analysis with Other News
In comparison to other articles discussing the US-China trade relationship, this piece focuses specifically on the human element of the trade war. While many articles might analyze economic data or political implications, this one brings forth the voices of those directly affected. This approach can create a more compelling narrative that resonates with the general public, who may not be as engaged with abstract economic discussions.
Economic and Political Implications
The situation presented in the article indicates potential ripple effects on global markets, particularly if tariffs remain in place or escalate. Investors and businesses will likely keep a close eye on developments between the US and China, which could impact stock performance, especially in sectors reliant on international trade.
Target Audience and Community Support
The article appears to resonate with communities that empathize with small business owners and those affected by economic policies. It aims to raise awareness among readers about the struggles faced by these businesses, potentially garnering public support for trade reforms or policy changes.
Market Influence and Stock Reactions
The ongoing trade tensions and the uncertainty surrounding tariffs can lead to volatility in stock markets. Companies in industries like consumer goods, which rely on imports from China, may face stock price fluctuations based on developments in US-China trade relations.
Global Power Dynamics
This article contributes to the larger conversation about global trade dynamics and the shifting balance of power. The trade war exemplifies how economic decisions can have far-reaching consequences, influencing not just bilateral relations, but also shaping global economic trends.
AI Involvement in Reporting
While there is no direct indication that AI was used in crafting this article, the structured narrative and focus on specific human stories suggest an editorial approach that may utilize data analytics to understand reader engagement. AI tools could help in identifying trends in public sentiment or tailoring content to resonate with specific audiences. The overall reliability of the article is strengthened by the personal testimonies of those affected by the tariffs, providing a human face to the economic data. However, the emotional tone and focus on certain narratives may indicate a bias towards highlighting the struggles rather than offering a balanced view of the broader economic implications.