Money: How Chinese manufacturers plan to get around US tariffs as Americans pay the price - - PressFrom - Australia
  •   
  •   

MoneyHow Chinese manufacturers plan to get around US tariffs as Americans pay the price

05:10  19 may  2019
05:10  19 may  2019 Source:   brisbanetimes.com.au

Asian shares hit fresh six-week lows ahead of crucial U.S.-China trade talks

Asian shares hit fresh six-week lows ahead of crucial U.S.-China trade talks Asian shares hit fresh six-week lows ahead of crucial U.S.-China trade talks

Chinese furniture maker Mercury Ma is sympathetic towards his customers in New York who will pay much more for his goods thanks to Trump's tariffs . So Donald Trump's extra 25 per cent tariff on Chinese furniture will have to be paid by Americans - Boloni's customers and dealers. No deal?

Anticipating trouble when US President began threatening tariffs a year ago, Boloni has been busy mitigating its risk. On Monday the US trade representative’s office began the paperwork to put tariffs on another US 0 billion in Chinese goods – in short, almost everything else China exports to the US .

How Chinese manufacturers plan to get around US tariffs as Americans pay the price© Sanghee Liu No deal? Not a big deal! Ma Yanfei, general manager of International Business at Boloni Smart Home Decor at the company’s showroom in Beijing.

In the sleek showroom of luxury furniture brand Boloni, Mercury Ma Yanfei is expressing sympathy for his customers in New York.

Tight contracts mean the upmarket kitchens and integrated cabinets shipped from this sprawling Beijing factory are paid for before they even set sail to the United States. So Donald Trump's extra 25 per cent tariff on Chinese furniture will have to be paid by Americans - Boloni's customers and dealers.

How Chinese manufacturers plan to get around US tariffs as Americans pay the price© Sanghee Liu Boloni sells high end "solutions" for property developers.

"They suffer. This is the reality," says Ma, Boloni's general manager of international business.

Stocks tumble around the world as trade-war deadline approaches

Stocks tumble around the world as trade-war deadline approaches US stocks slumped with markets around the world overnight as the hours ticked toward a midnight deadline in the next front on the US-China trade war. Tensions between the world's two largest economies are dragging down stocks from Mumbai to Milan as a deadline of today (2pm AEST) approaches, when the United States said it would impose more tariffs on Chinese goods. The worries about trade have halted what has been the hottest start to a year for US stocks in decades, and the S&P 500 index is on pace for its worst week of 2019.

You’ve got to let us out. Trump has incorrectly asserted that China is paying his tariffs , when actually American businesses and consumers pay the tariffs . US stocks slumped with markets around the world overnight as the hours ticked toward a midnight deadline in the next front on the US - China .

Americans are paying the tariffs . But China is also paying the price for having its goods cost more in President Donald " Tariff Man" Trump: We 're going to put tariffs on everything China sells to us "A tariff war could have an outsized effect on equity valuations relative to the macroeconomic effect

Well-heeled customers in big American cities make up a third of his business. This includes retail customers and property developers who offer Boloni's kitchens, loungeroom and bedroom "solutions" for new apartments sold off the plan.

How Chinese manufacturers plan to get around US tariffs as Americans pay the price© Sanghee Liu Mercury Ma in the showroom.

"We are facing a big problem with our project section because projects are price sensitive - the budget is done four years before the whole project is delivered."

But he emphasises that, as a result of the extra US tariffs, "the price will finally be paid by people in the US, not by us".  As a result, the US dealers will have to trim their 40 per cent mark up.

Ma is confident, though, that companies will be able to keep trading, despite the tariff hike. Anticipating trouble when US President began threatening tariffs a year ago, Boloni has been busy mitigating its risk.

ASX slumps at open after Wall Street falls

ASX slumps at open after Wall Street falls The Australian share market has opened lower amid renewed concern about US-Chinese trade tensions.

In the United States , the trade war has brought struggles for farmers and manufacturers and higher prices In supporting tariffs as president, he said that China was costing the American economy prevent Chinese state-controlled companies from buying American technology companies and were

The Trump tariffs are a series of United States tariffs imposed during the presidency of Donald Trump as part of his " America First" economic policy to reduce the United States trade deficit by shifting

A showroom will open in Sydney in July, after Boloni began partnering with Chinese property developers on luxury inner city apartments, and Country Garden, another Chinese company which is set to develop 10,000 new homes near the Badgery's Creek airport.

There are more showrooms in Vancouver and Mexico. Boloni recently acquired a 100-year-old German furniture company.

"If we put all the apples in one basket we would have a big problem in the future, so this was our preparation, before [Trump] did anything special," Ma grins.

And he doesn't think one man can disrupt trade between China and the United States in the long term.

"Trump wants to build a wall, he can build a wall. But eventually people will go under the ground. Most Mexicans actually go to the US by tunnel, right?"

Boloni has a lawyer in Washington arguing for an exemption to the latest US tariffs on the basis that it should be classed as a global company that assembles in China. The company uses a design team in Italy and runs its Chinese factory with German management. Its hardwood timbers come from Europe, and even the glue comes from Germany.

Trump's in love with the US-China trade war - markets feels differently

Trump's in love with the US-China trade war - markets feels differently US financial markets were shaken by China's response to the Trump administration's escalation of the trade war.

WASHINGTON — President Trump said Friday that the United States had reached an interim deal with China that would forestall a tariff increase slated for In exchange, the United States will not move ahead next week with plans to raise tariffs on 0 billion worth of Chinese goods to 30 percent.

The United States and China were nearing a trade deal that would lift tariffs , open the Chinese market to American companies and strengthen China ’s intellectual property protections. But discussions fell apart last weekend, when China called for substantial changes to the negotiating text

"The new China is multinational companies like ours. We just acquired a company in Germany - we can produce in Germany ... We can build a factory in the US," he says.

He knows of other lower-end Chinese furniture companies who will shift their factory to Vietnam to beat the US tariff, but the profits still flow back to China.

"The US, they want to deny globalisation. China is a success because of globalisation. We have a lot of global partners," he says.

Ma's confidence is typical of the defiant mood that has swept China this week in the wake of Trump derailing trade talks and hiking tariffs to 25 per cent on $US200 billion ($290 billion) in Chinese goods.

On Monday the US trade representative's office began the paperwork to put tariffs on another $US300 billion in Chinese goods - in short, almost everything else China exports to the US. Beijing retaliated by announcing new tariffs would be added to $US60 million in US products from June 1.

By Thursday, Trump had issued an order banning foreign telecommunications equipment in US networks - seen as a ban on China's top global brand Huawei. The US commerce department said it would list Huawei as a national security risk, which would potentially ban Huawei from buying crucial US microchips without US government approval.

China’s state party posts defiant message about trade war with U.S. on social media site

China’s state party posts defiant message about trade war with U.S. on social media site The Chinese government posted a defiant message about its trade war with the U.S. on social media. "Bully us, wishful thinking!” it said in part.

President Trump’s new tariffs on Chinese imports, which took effect at 12:01 a.m. on Friday, are taxes that will be paid by Americans . That is a simple fact, and it remains true no matter how many times Mr. Trump insists the money will come from China .

The assumption that tariffs are borne by American consumers is embedded in Trump’s eagerness to impose the tariffs in the first place. So, the economic cost of a tariff exceeds the amount actually collected by the government. American manufacturers wouldn’t gain any pricing leverage, and American consumers wouldn’t If Americans didn’t really pay the tariffs , they would be pointless.

Chinese state media has coursed with nationalism this week, and vows that China would not give in to US "bullying" on trade.

After months of restraint in response to US complaints about Chinese trade practices including intellectual property theft, forced technology transfers and state-subsidies for Chinese companies, Chinese media outlets have let loose.

"Don Quixote style self-deceiving!" cried China Radio International. "Barefaced lies," wrote Economic Daily. "Who is capricious and who is back tracking?" demanded the usually staid Communist Party official newspaper, People's Daily.

The coordinated line from state propaganda outlets was that Trump had derailed trade talks with his "extreme pressure tactics".

Chinese Foreign Minister Wang Yi, in Russia, said the trade talks had made substantial progress but have faced difficulties that "need to be taken seriously and solved".

Chinese President Xi Jinping and Trump are due to meet at the end of June at the G20 meeting in Japan.

Given the heat in the media, and the nationalistic impulses being invoked, it seems unlikely Xi will back down and hand Trump a deal that cannot be presented as a win to the Chinese public.

The latest economic data for April has shown growth in Chinese retail spending has slowed to 7.2 per cent, as growth in industrial output slowed to 5.4 per cent, after a strong March.

But the Chinese public is being told measures already put in place to support small business, manufacturing and exporters - tax cuts and easier credit - are working and will overcome the tariff threat.

For his part, Ma says he isn't thinking about the politics, he is just an entrepreneur who will find a way to keep trading if the tariff war continues.

"The American people won't benefit. They still have to buy furniture," he says.

"I don't think there is any benefit in closing the door to globalisation."

Read more

Nike, Adidas call tariffs 'catastrophic' in open letter to Trump.
Nike Inc., Adidas AG and other footwear giants urged President Donald Trump to reconsider his tariffs on shoes made in China, saying the policy would be “catastrophic for our consumers, our companies and the American economy as a whole.” In all, 173 companies signed an open letter to the president, dated Monday and posted on the industry trade association’s website. It was also sent to Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross and National Economic Council director Larry Kudlow.

—   Share news in the SOC. Networks

Topical videos:

usr: 1
This is interesting!