Has Trump cancelled Christmas? China’s decorations makers report no US orders

By Andrew Silver and Casey Hall

SHAOXING, China (Reuters) – Chinese producers of plastic Christmas trees and other festive decorations say orders from U.S. clients, which are crucial for their business, should have started to come in by now. But because of surging import tariffs, they haven’t.

U.S. President Donald Trump has raised tariffs on Chinese imports by 104%so far this year in an escalating trade war that threatens great pain for the world’s largest exporter of manufactured goods.

U.S. retailers are almost completely reliant on China for Christmas decorations, where they source 87% of such goods – worth roughly $4 billion. Chinese factories are also heavily dependent on the U.S. market, where they sell half of what they make.

If Americans want new Christmas decorations this year, they will have to pay a lot more for them – if they can find them on the shelves at all.

“So far this year, none of my American customers have placed any orders,” said Qun Ying, who runs an artificial Christmas tree factory in the eastern city of Jinhua.

“Of course it’s about the tariffs. By mid-April all the orders are normally finalised, but right now … it’s hard to know if any orders are coming. Maybe American customers won’t buy anything this year.”

In Shaoxing, some 160 kilometres (100 miles) away from Jinhua, factory owner Liu Song was confident his business can cope by trying to sell more to Russia, Europe and Southeast Asia, which together take 75% of his products already.

“We are worried that U.S. orders will come down,” he said, while adding: “We will definitely win this trade war.”

Jessica Guo, who also manages a Christmas tree factory in Jinhua, said she was just notified by an important U.S. customer that it is pausing a 3 million yuan ($408,191) order for which she had already spent 400,000 yuan on materials.

She expects that order will soon be cancelled and worries about her business.

“My peers and I rely on U.S. orders to survive,” Guo said. “This will inevitably affect a lot of people. No one can escape.”

Economists say the trade war will shave 1-2 percentage points off Chinese economic growth this year, exacerbate industrial overcapacity issues, threaten jobs, and further fuel deflationary forces.

As Chinese exporters sell less to the U.S., which last year bought goods worth more than $400 billion, they will have to compete ever more intensely on prices in other markets.

This will hit their already-thin profit margins and force them to cut costs at home, economists say.