Chinese manufacturing cars are aligned in rows of the port of Nanjing, in the Chinese province of Jiangsu, on April 16, while they are waiting to be loaded on ships for export.
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For Bonnie Ross, an importer of clothing based in New York, the news that the United States would temporarily reduce the prices on China was a relief – at least for a short period.
“It was a great relief for about five minutes,” said Ross.
Then the race started.
Ross had withdrawn two cargo cargo containers from ships in China when the 145% prices entered into force last month. Now she tries to get as much goods in the United States as she can while the lower rates are in place.
However, she fears that other companies will be in the same crowded boat.
“Now it’s going to be a rush because everyone wants it in the next 90 days,” said Ross. “What will happen to freight rates?”
For business owners like Ross, a reduction in prices on China is good news – but it also extends uncertainty.
Although the United States and China have agreed to reduce the paralyzing prices they had imposed, lower import taxes should only last 90 days – without certainty of what is happening thereafter.
The Chinese import tax in the United States will increase from 145% to 30%, while price costs on American products will drop from 125% to 10%. The remaining rates are even much higher than the United States billed before President Trump launched his trade war.
Pass the next four to six weeks
Jay Foreman, whose company based in Florida Fabrique Tinkertoys, Lincoln Logs and other toys in China, obtained the news of the agreement at 4:30 am and immediately called partners in Hong Kong to start planning expeditions.
“We held everything in factories and ports, because we did not want to risk putting anything on containers with a rate of 145%,” explains Foreman.
He says that an import tax of 30% is more manageable, although at least part of this cost will have to be reflected in consumers in the form of higher price.
“It is a complete disturbance, but obviously, I am sure that everyone in the supply chain would be better than it is better that it was,” says Foreman.
Some companies can run to produce and ship products early for the Christmas holiday season to avoid the risk of higher prices in the fall. But it is also a bet, says Foreman, because it is possible that the administration commands lower prices at the end of the three -month window.
“Right now, I’m just trying to go over the next four to six weeks,” he said. “That I double the factories to try to occur more and to go out before the end of the 90 days, I will probably need three to four additional weeks to understand this.”
A temporary offer is even better than nothing
Jonathan Silva directs a Massachusetts company which produces high -end board games in China. He has nine goods containers which he has held in China that he will now send to the United States.
“We have to recover products from the shelves,” explains Silva. “I think we are really getting closer to the tipping point of the start of the shortage.”
“30%-It’s not ideal,” he adds. “I think there will be slight price increases.”
The Treasury Secretary Scott Bessent (right) and the US trade representative Jamieson Greer hold a press conference in Geneva on May 12 to give details on “substantial progress” after a two-day camera meeting between the United States and China on prices.
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But at least Silva is no longer afraid to go bankrupt.
For the moment, like the other business owners, he rushes to produce and send more games in time for the holiday shopping season.
“The tap has been on,” said Silva. “Everyone will place orders in next week, and we place our orders today for what we think we can do in the next 90 days and try to save as much business for the holidays as possible.”
Whatever the price landscape at 90 days, Silva says that it will explore alternatives to manufacturing in China, including other Asian countries and the United States.
“The last 40 days have been the 40 most difficult days in the life of our business,” he said. “And I’m glad we’re going to be able to get out. But we don’t know what’s going to happen tomorrow. It’s very unpredictable.”
