US importers are stocking up ahead of a possible trade war under Donald Trump. The Wall Street Journal cited economists’ analysis as saying that China’s exports are expected to maintain strong growth in the coming months, spurred by early hoarding.
The practice of us importers hoarding Chinese goods has been around for a long time. Donald Trump launched a trade war with China during his first term, when US companies stocked up ahead of the imposition of tariffs that contributed to a rise in the US trade deficit with China in 2018. China is now the world’s largest exporter of goods, and the US is the largest buyer of Chinese goods. US imports of Chinese goods totalled about $430bn last year. The Wall Street Journal said the tariffs would do little to reduce America’s global trade deficit or its trade deficit with China. The IMF also believes that the root cause of America’s long-term trade deficit with China is the high demand for Chinese goods by American consumers.
A marketer at an electronics manufacturer in Guangdong, China, told the Wall Street Journal that there had been an increase in inquiries from US customers and that it was”Obvious” that US customers were”Very worried”. He added that the company’s sales have not been affected much at the moment and that the final cost of the tariffs will be borne by importers and consumers. An American dealer who buys marble from China complained that he would like to import enough from China in advance to survive Donald Trump’s tenure.
Chris Tang, a professor of supply chain management at the University of California, Los Angeles, said stocking up in advance was a “Short-term solution” for American companies. But, embarrassingly, it is hard for US companies to find alternatives. Yurken, founder of the ABC Group, which helps American companies manage supply chains in Asia, says China has big advantages in commodity prices, infrastructure and trading channels that other countries can not match, so China will continue to dominate manufacturing.