US retailers almost completely rely on China for Christmas decorations, with 87% of such purchases coming from China, valued at 4 billion USD (17.985 billion MYR). Half of these products from Chinese factories are also sold to the US.
The escalating trade war and the US imposing additional tariffs will cause Christmas decoration prices to soar. Chinese producers of plastic Christmas trees and other holiday decorations say that orders from US customers, which should have been received by now, are nowhere to be found. Many factories worry about losing the crucial US business.
● All orders are usually finalized in April
According to foreign media reports on the 10th, an artificial Christmas tree manufacturer in Jinhua, Zhejiang, said, “So far this year, my American customers have not placed any orders.” He added that usually by mid-April, all orders would be finalized, but now it's hard to know if there will be any orders.
Similarly, Ms. Guo, who runs a Christmas tree factory in Jinhua, disclosed that she just received a notice from an important US customer to suspend an order worth 3 million RMB (1.8352 million MYR), and she had already spent 400,000 RMB (244,700 MYR) on materials for this order. She expects the order will soon be canceled and is worried for herself and her peers who rely on US orders for survival, “This will inevitably affect many people, no one can escape.”
● Factory owners trying to find alternative routes
Located about 160 kilometers from Jinhua, factory owner Liu Song (phonetic) in Shaoxing, Zhejiang, believes his business can survive the current situation by selling more products to Russia, Europe, and Southeast Asia, which already account for 75% of his sales. He is concerned about reduced US orders but added, “We will definitely win this trade war.”
Foreign media quotes economists saying that the trade war will reduce China’s economic growth by 1% to 2% this year, exacerbate industrial overcapacity issues, threaten employment, and further intensify deflationary pressures.