[By Guancha Observer Network, Qi Qian] A breakthrough has been made in the tense situation between China and the US trade, and Chinese factories and ports have become active accordingly. Both countries' enterprises are eager to fully utilize this hard-won "truce period" for economic and trade exchanges. According to CNN's May 16 news report, after the announcement of the agreement, the order volume of some Chinese companies surged by 30%, and the number of container transportation orders from China to the US rose nearly 300% in a short time.
Many industry insiders said that as companies rush to transport accumulated inventory, ports will soon return to their busy state, but this also means delays and rising freight costs. An enterprise representative stated that this week, the freight cost of transporting a container to the US increased by about 50% and will ultimately be borne by American consumers.
However, the report pointed out that even so, American enterprises are actively contacting Chinese suppliers to ship goods, many of them canceling orders previously placed in Vietnam, Indonesia, and other countries to avoid tariffs, and turning back to China. Facing the still-existing uncertainty of tariffs, a boss of an American company emphasized that he would "do everything possible to stay in China." The boss of a Chinese company pointed out that they are actively exploring new markets outside the US.
The number of container transportation orders surged nearly 300%.
Niki Ye, who works in toy procurement in southern China, said that after the success of the Sino-US talks, her company's order volume surged by 30%, and they are currently increasing manpower to meet demand. She said, "This is just the first week."
Liu Changhai, sales manager of an export agency specializing in home decoration in East China, said that the current sales of his company are equivalent to those of previous peak seasons, but shipments will be delayed. He told CNN, "New orders haven't been produced yet, so they are not ready for shipment."
The report mentioned that as companies rush to transport accumulated inventory, ports of both countries will soon return to their busy state. According to data from container tracking software provider Vizion, in the seven days ending May 13, the number of container transportation orders from China to the US surged nearly 300% compared to the week ending May 5.
This marks a fundamental change compared to last month.
US President Trump escalated the tariff war in April, causing the tension in Sino-US trade to continue to rise, with tariffs being too high, leading to a virtual standstill in trade between the two once closely connected economies. On May 6, Gene Seroka, executive director of the Port of Los Angeles, said that that week, the cargo volume of the Port of Los Angeles dropped by about 50%, and product prices rose approximately two and a half times compared to the previous month.
Video screenshot showing the halving of imports at the Port of Los Angeles
However, after holding out for a month, Trump finally backed down.
The high-level Sino-US economic and trade talks were held in Geneva, Switzerland, on May 10-11. Both sides agreed to reduce tariffs within 90 days, cutting rates by 115%. Trump himself stated on the 12th, "The talks in Geneva were very friendly, and the relations between the two countries are very, very good."
Last week, Ge Jizhong, chairman of Shanghai Xinhai Customs Declaration Group, told reporters, "Regardless of the outcome of future negotiations, companies must seize this 90-day period. American companies will rush to restock within 90 days, and Chinese companies will rush to ship goods."
American enterprises urgently contact: Cancel Vietnam, Indonesia orders, return to China
Ben Schwol works at a Chinese supply chain management company, providing help to businesses in product procurement and China and Asia strategies. He told CNN that this week, he has been busy handling customer inquiries and helping them contact Chinese suppliers.
Schwol said that some of these people had already shifted their supply chains and manufacturing from China to other Asian countries due to high tariffs on Chinese goods, placing orders in Vietnam, Indonesia, etc. After hearing the news of the easing of Sino-US trade tensions, they all called to ask, "We have already placed orders in Vietnam and Indonesia. Can you transfer (the orders) back to China?"
He added that although the US tariffs on China are still higher than before Trump's second term, American companies are still rushing to restart canceled orders or transport stranded goods from China.
On May 12, US Treasury Secretary Besent and Trade Representative Griller held a press conference after the high-level Sino-US economic and trade talks IC Photo
Vivi Tong's factory produces remote-controlled cars sold to large American retailers. Recently, she has been busy shipping goods from the warehouse to cope with the surge in orders. There are no shortage of such Chinese enterprises. Previously, media reports indicated that Chinese suppliers are working overtime, even staying up late, to meet the urgent demands of American companies, which require them to ship backlogged orders within 90 days.
Greg Maza runs a lighting company in Danbury, Connecticut. He said, "We are placing orders," and he is one of those "quickly taking action" to receive inventories previously produced in China but not yet shipped. He noted that he is in a more advantageous position because last year they built inventory in the US to prepare for tariffs.
However, Maza said that his orders will still face much higher tariffs than last year. "I can slightly increase the price upon arrival and make some internal adjustments to achieve this," he added. His goal is to maintain the status quo as much as possible rather than raise prices.
"I will do everything possible to stay in China"
CNN reported that in addition to tariffs, there are other factors that will increase the cost of living for American consumers.
Ms. Vivi Tong said that this week she saw an increase in freight costs. The cost of transporting a container to the US was previously $4000, now it has risen by about 50%. She said that this increase will be borne by American buyers, and ultimately may be passed on to American consumers.
At the same time, shipping companies also reported an increase in demand. A spokesperson for Danish shipping company Maersk said that at the end of April, the volume of maritime transport between China and the US fell by 30% to 40%, but booking volumes increased after the results of the Sino-US talks. The company is increasing capacity on the trans-Pacific route.
Ben Tracy, vice president of strategic business development at container transportation tracking company Vizion, found that in the seven days ending Tuesday, container bookings surged by 277%. He said, "The container export boom" could disrupt the usual summer shipping peak.
The article mentioned that Trump's policies are subject to frequent changes, creating serious uncertainties that affect Sino-US economic and trade exchanges. The report pointed out that due to Trump's simultaneous imposition of high tariffs on China and Southeast Asian countries previously considered as tariff avoidance areas, American enterprises face complex and pressing choices: During the 90-day tariff suspension period, should they continue to rely on China or terminate years of commercial ties with China?
Maza said he considered moving part of the production to Vietnam, but building a factory might take about a year and the final production cost per product would be about 10% to 15% higher than manufacturing in China. However, he said he is not yet ready to completely abandon China.
"I will do everything possible to stay in China because my Chinese factory has always supported me, and I have always supported them... I value partnerships and relationships, and they make my products excellent, so I will fight until the end," Maza said.
For Chinese factories facing similar uncertainties, the top priority is to explore new markets. Vivi Tong said, "We are striving to expand into other new markets... especially Europe, where our orders have grown nearly 20%. We need to expand."
This article is an exclusive contribution by the Guancha Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7504986444101091859/
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