In Trump’s Remodelling of the US, the North Pole is in China

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The continually changing US tariffs on Chinese goods is detrimental to American businesses and their long term plans.

Op/Ed by Chris Devonshire-Ellis 

And so it continues…in another twist of the US-China tariff war, US President Donald Trump has announced that some of the additional tariffs imposed on Chinese products will no longer be implemented from September 1 – two weeks from now – but will take effect from December 15 instead. Apparently, pressure from certain US retailers caused Trump to delay the imposition so as to allow American stores and middlemen to stock (Chinese-made) products for American kids at Christmas.

While the tariffs on Christmas gift-worthy items, such as mobile phones, laptops, video game consoles, some toys, computer monitors, and certain footwear and clothing have been suspended because of  “health, safety, national security and other factors”, it is Christmas that Trump had in mind.

Being seen as the new Father Christmas, he has stepped in to permit Christmas to happen this year and defer any punitive actions. Presumably because if not doing so American kids would fall ill, be exposed to dangers unknown, and pose national security threats. One city in Guangzhou does actually make the world’s largest number of plastic Christmas trees, so maybe Uncle Donald has a point.

However, it’s also possibly the most ridiculous justification for delaying tariffs that I can remember.

There are underlying observations though.

How the US economy is dependent on purchasing Chinese products.

It seems the tariff war has reached some limits. Christmas, for example. But what about Yom Kippur? Eid? The Mexican Day of the Dead can probably be written off for now but how about July 4? Elvis Presley’s birthday? All these festive occasions have their souvenirs made in Chinese factories; there are eight public holidays in the US every year.

The slow realization among US businesses about what is happening.

Christmas is four months away, and US retailers who have known of the ramifications of the US-China trade war for two years now, leave it this late to pressurize Washington DC to get toys made for Christmas? Guys – listen up – Vietnam, other countries in ASEAN and elsewhere will be more than happy to take your orders. Then this time next year you needn’t be in such a panic or have to phone the White House hotline or buy an expensive Mar-a-Lago membership.

It’s already game over in the trade war. 

China has won. Mainly because they are able to replace US trade with buying goods instead from ASEAN and the Belt and Road Initiative. The main observation, however, is this – when the Chinese start buying from somewhere, it is probably a good idea to follow suit. Here’s some complimentary stuff to read about sourcing from alternative destinations in Asia:

Go for it. The trade war is here to stay, and American businesses need some certainty. After all, who knows if Uncle Donald will be so generous next year. Besides, it’s the American thing to do.

Happy Christmas.


About Us

China Briefing is written by Dezan Shira & Associates. Chris Devonshire-Ellis is the Founding Partner. The firm assists foreign investors throughout Asia and has done since 1992, servicing clients from offices across China, Hong Kong, ASEAN, India, and the Belt & Road. Please contact us at china@dezshira.com or visit us at www.dezshira.com.