[Source/Observer Network, Liu Chenghui] The Sino-US economic and trade talks have achieved positive results, and both sides agree to reduce tariffs within 90 days, bringing a ray of hope to the global trade order.
"We have hundreds of containers stranded in China, and now we can finally load them onto ships!" Mark Barrocas, CEO of American home appliance company "Shark Ninja," sighed with relief.
This is just one of many American companies taking action. On May 12, The Wall Street Journal noticed that after the news of the agreement between China and the US was released, numerous American companies reliant on Chinese imports quickly acted, seizing this precious opportunity to ship the backlog of goods from China to the United States without delay.
Many American companies remain cautious about Trump's tariff policies, complaining that his unpredictability makes business planning difficult, adding too many unknown factors to the future.
At midnight local time on the 11th, Barrocas kept refreshing the news updates, anxiously waiting for the news of the Sino-US tariff agreement.
At midnight on the 12th, the news finally came: both sides agreed to reduce tariffs within 90 days, cutting the rate by 115%.
Barrocas immediately notified the Chinese factories to ship goods to the United States, including coffee machines and smoothie makers. "When the tariffs took effect, we had hundreds of containers stranded in China, and now we can finally load them onto ships!"
CEO of American home appliance company "Shark Ninja" Mark Barrocas, The Wall Street Journal
Jay Foreman, CEO of Florida-based toy company "Basic Fun," was equally thrilled.
To avoid the high tariffs imposed by the Trump administration, which reached 145%, "Basic Fun" froze all shipments of goods from China, resulting in the accumulation of toys such as "Care Bears" and "Tonka trucks" in Chinese factories.
But at 4 a.m. on the 12th, when the screen lit up with the news of the agreement between China and the US, Foreman immediately jumped out of bed and contacted suppliers, demanding immediate shipment.
"We are going to ship all the goods now," Foreman said. "We must immediately contact freight companies in China to arrange for factory loading, and we must immediately book container ship space."
The report noted that over the past few months, the high tariffs imposed by Trump on China have left American companies reliant on Chinese imports in dire straits. These companies were forced to raise prices, cut costs, and lay off employees to absorb the cost of tariffs. This tariff agreement may break the de facto trade embargo between the two countries.
Several American companies stated they would immediately arrange for cargo to be shipped to U.S. ports.
In the early morning of the 12th, Jennifer Burch, co-founder of hair care product company "Hightail Hair," upon learning of the tariff agreement, immediately began processing nearly 4,000 motorcycle helmet-specific hairnets stranded in China. "This is absolutely good news," she said. "We will ship the goods out as soon as possible."
CMCBrands, a clothing company, had two containers of sportswear and outerwear stranded in Chinese factories for a month. Ellen Brin, the company's CEO, said she plans to ship them as soon as possible and work with clients to mitigate the impact of the tariffs.
This 79-year-old St. Louis-based company has received an urgent email from its Chinese partner factory, requesting resumption of production for remaining orders. "If the deadlock continues longer, we will miss the autumn sales season, and customers will turn to other suppliers," Brin said.
Considering the high tariffs, Scott Johnson, president of Tennessee-based pencil manufacturer "Musgrave Pencil," originally planned to return Chinese-made pencil boards. However, after learning of the Sino-US tariff agreement, he changed his mind.
He also complained that even with the reduction in tariffs, the total tax rate for Chinese pencil boards remains close to 60%.
Tennessee-based pencil manufacturer "Musgrave Pencil" factory, The Wall Street Journal
Clearly, although the temporary suspension of tariffs is good news, American companies still need to consider how to survive in the current high-tariff environment.
Industry organizations warned that Trump's tariffs could lead to price increases for back-to-school and holiday goods. Major ports like the Port of Los Angeles do not expect a sudden surge in Chinese imports. Some business leaders believe that the unpredictable nature of tariff policies still makes business planning difficult.
"Compared to normal times, a 30% tariff is a disaster," Steve Greenspon, CEO of housewares company "Honey-Can-Do International," said. "But compared to 145%, it is already great news. However, businesses will still face pressure to increase prices and shrink profits."
Gene Seroka, executive director of the Port of Los Angeles, pointed out that businesses relying on holiday sales or critical goods like medical supplies might take advantage of this opportunity to restock. "However, ordinary goods like refrigerators and patio furniture will not suddenly flood the market."
Many companies have already stockpiled inventory this year to avoid new tariffs. Since Trump launched a tariff war against major trading partners, U.S. importers have frozen or canceled billions of dollars worth of orders, potentially leading to shortages during back-to-school and holiday seasons.
CNN reported on the 10th that officials at West Coast ports in the U.S. revealed a "shocking phenomenon" to them on the morning of the 9th: In the past 12 hours, no cargo ships have departed from China bound for major West Coast ports in the United States. This situation has never occurred since the outbreak of the pandemic.
Earlier, CNBC pointed out that after the reduction in tariffs, it is expected that trade between China and the U.S. will quickly recover, reversing the downturn since Trump announced high tariffs in early April.
Analysts believe that we should not expect the trade issues between China and the U.S. to be easily resolved. However, the consensus reached by both sides has eased trade tensions and created a good starting point for further engagement.
"Better than I expected. I thought the tariffs would drop to around 50%, but this time it's much lower." Zhang Zhiwei, chief economist at Pinpoint Asset Management, said that this is clearly very positive news for both economies and the global economy, significantly reducing investor concerns about short-term damage to global supply chains.
Zhang Zhiwei also reminded that "we must also note that this is only a temporary tariff reduction for three months. So this is just the beginning of a long process. Both sides may need several more months to propose solutions or reach a final trade agreement, but this is a very good start."
BBC reported on the 12th that the next 90 days may also be crucial for exporters.
"This joint statement brings a ray of warmth to the tense global trade environment, alleviating some of the cost pressures exporters faced over the past month," Chris Pang, founder and CEO of Hong Kong-based export service provider "GenPark," told BBC. He expects his business to pick up in the next 90 days because it is a rare window of opportunity for export-oriented enterprises, with many companies rushing to ship their goods.
Pang believes that this tariff adjustment once again demonstrates the deep integration of the global economy, despite geopolitical uncertainties. The trend of cross-border trade and the complementarity of the U.S. and Chinese economies continue to play a role.
This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.
Original Source: https://www.toutiao.com/article/7503789213147234826/
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