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China officially filed a complaint with the World Trade Organization (WTO) ON September 4 in response to the U.S. raising tariffs from 10% to 15% on US$300 billion worth of Chinese goods.
Allegedly, the Chinese authorities have asked the WTO to facilitate ‘consultations’ with the U.S. to reduce or end the tariffs. On September 1, the U.S. put tariffs on US$112 billion worth of Chinese goods, including footwear, clothing and textiles, despite several companies and brands from the U.S. footwear sector having urged Trump to cancel further taxes. Read more here.
According to the Peterson Institute for International Economics, the new tariffs mean 69% of consumer goods will face an import duty, up from 29%. Meanwhile, China has responded by adding tariffs on US$75 billion worth of U.S. goods, including on wet-blue. As reported by ILM, the majority of U.S. hide and skin exports to China could be targeted for a 5% tariff increase starting December 15, 2019.
In a move to explore new markets, China is said to be trying to reach a trade deal covering most of eastern and southern Asia before November, to boost its factories and increase the purchasing power of its consumers. The Chinese government is also seeking to help small enterprises directly hit the by additional U.S. tariffs by launching a debt reduction campaign. For instance, the Zhejiang Province in eastern China had already unveiled a US$30 billion plan to cut taxes and regulatory costs for small businesses in May.
Bruce Xu, General Manager at Yong Du Shoes, which employs around 700 workers in Dongguan and produces 800,000 to a million pairs of cowboy boots a year, mainly exported to the U.S., said he has seen the company’s profits decline year after year, especially due to the weakness of the Chinese currency. Without other potential markets for the product, Xu expects tough times ahead. He has tried to run factories in Vietnam before but said it isn’t as simple as it seems, with the language barrier seen as major problem. So far, Xu has worked closely with his customers to find solutions and travels to meet them in the U.S. each year.
Sources: New York Times/Fox News