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CNBC
13-05-2025
- Business
- CNBC
U.S.-China tariff reprieve is enough to get products on the shelves in time for Christmas
BEIJING — The U.S.-China tariff cuts, even if temporary, address a major pain point: Christmas presents. Nearly a fifth of U.S. retail sales last year came from the Christmas holiday season, according to CNBC calculations based on data from the National Retail Federation. The period saw a 4% year-on-year sales increase to a record $994.1 billion. "With the speed of Chinese factories, this 90-day window can resolve most of the product shortages for the U.S. Christmas season," Ryan Zhao, director at export-focused company Jiangsu Green Willow Textile said Monday in Chinese, translated by CNBC. His company had paused production for U.S. clients last month. He expects orders to resume but not necessarily to the same levels as before the new tariffs kicked in since U.S. buyers have found alternatives to China-based suppliers in the last few weeks. U.S. retailers typically place orders months in advance, giving factories in China enough lead time to manufacture the products and ship them to reach the U.S. ahead of major holidays. The two global superpowers' sudden doubling of tariffs in early April forced some businesses to halt production, raising questions about whether supply chains would be able to resume work in time to get products on the shelves for Christmas. "The 90-day window staves off a potential Christmas disaster for retailers," Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions, said Monday. "It does not help Father's Day [sales] and there will still be impact on back-to-school sales, as well as added costs for tariffs and logistics so prices will be going up overall," he said. But U.S. duties on Chinese goods aren't completely gone. The Trump administration added 20% in tariffs on Chinese goods earlier this year in two phases, citing the country's alleged role in the U.S. fentanyl crisis. The addictive drug, precursors to which are mostly produced in China and Mexico, has led to tens of thousands of overdose deaths each year in the U.S. The subsequent tit-for-tat trade spat saw duties skyrocketing over 100% on exports from both countries. While most of those tariffs have been paused for 90 days under the U.S.-China's new deal announced Monday, the previously-imposed tariffs will remain in place. UBS estimates that the total weighted average U.S. tariff rate on Chinese products now stands around 43.5%, including pre-existing duties imposed in past years. For running shoes produced in China, the total tariff is now 47%, still well above the 17% level in January, said Tony Post, CEO and founder of Massachusetts-based Topo Athletic. He said his company received some cost reductions from its China factories and suppliers, but still had to raise prices slightly to offset the tariff impact. "While this is good news, we're still hopeful the two countries can reach an acceptable permanent agreement," he said. "We remain committed to our Chinese suppliers and are relieved, at least for now, that we can continue to work together." U.S. retail giant Walmart declined to confirm the impact of the reduced tariffs on its orders from China. "We are encouraged by the progress made over the weekend and will have more to say during our earnings call later this week," the company said in a statement to CNBC. The U.S. retail giant is set to report quarterly results Thursday. China's exports to the U.S. fell by more than 20% in April from a year ago, but overall Chinese exports to the world rose by 8.1% during that time, official data showed last week. Goldman Sachs estimated around 16 million Chinese jobs are tied to producing products for the U.S.
CNBC
02-05-2025
- Business
- CNBC
U.S. tariff uncertainty puts China-made Christmas presents in question
For years, Christmas merchandise has been hitting the U.S. shelves earlier, as retailers try to capitalize on the lucrative holiday season — a retail phenomenon known as "Christmas creep." However, tariffs could be the Grinch that disrupts year-end festivities, as Chinese factories and their U.S. buyers navigate tariff uncertainties to ensure that shelves stateside will be well-stocked in time for Christmas. Shortly after U.S. President Donald Trump unveiled sweeping tariffs on April 2 — including a 34% tariff on imports from China that were later ramped up to 145% — many U.S. retailers' reaction was to halt their orders from Chinese suppliers, forcing factories to pause production, according to CNBC interviews. However, industry representatives say that some production has restarted in the last few days, as concerns about business disruptions and missed opportunities outweigh the tariff uncertainties. "If you don't start producing in the next couple of weeks, you're going to start missing Black Friday and Christmas," Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions, said in a phone interview Tuesday. "Both sides are trying to be flexible to some degree," he said. "Retailers are starting to realize if these supply chains stop, it will be much more difficult to get them up and running [again]." Johnson described how, for example, a pause in orders for a factory making spoons would impact the company that rolls the steel, as well as the iron ore smelter. "These supply chains themselves, the upstream, are also starting to close down. If they close down, even if we have some kind of a deal, it will take time for things to [restart]." Despite some rerouting of China-made goods through other countries, replacing existing supply chains and shipping schedules will be difficult to achieve overnight. For 36% of U.S. imports from China, more than 70% can only be sourced from mainland suppliers, according to a Goldman Sachs analysis earlier in April. For example, electronic products need to be shipped out of China by early September to hit U.S. shelves right after the Thanksgiving holiday at the end of November, taking into account customs clearance and the distribution chain, said Renaud Anjoran, CEO of Agilian Technology, an electronics manufacturer in China. The Guangdong-based company delivers half of its products to the U.S. market. It takes around six months to manufacture, test, assemble, and package, meaning suppliers ideally should have started preparing for these orders in March, said Anjoran. Many U.S. buyers had started stockpiling inventories since late last year, anticipating higher tariffs after Trump returned to office. As frontloading continued, China's exports to the U.S. rose by 9.1% in March from a year ago, according to CNBC's calculation of official customs data, while imports from fell 9.5% on year. April trade figures are expected to be released on May 9. But those frontloading efforts have started to dwindle. The number of cargo-carrying container ships departing from China to the U.S. has fallen sharply in recent weeks, according to Morgan Stanley's tracking of high-frequency shipping indicators. Cancelled shipments have also skyrocketed by 14 times in the four weeks from April 14 to May 5, compared to the period from March 10 to April 7, the investment bank said. In April, a gauge of new export orders from Chinese factories fell to the lowest level since late 2022, according to the national statistics bureau. "Currently, we do not have a lot of purchase orders for the next few months from American customers," Anjoran said. Most of his clients have stockpiled inventory that was shipped to the U.S. before Chinese New Year at the end of January, with some orders trickling in March and April. Some U.S. buyers are waiting to see whether tariffs will be reduced to a more acceptable level in May before resuming shipments, Ryan Zhao, a director at Jiangsu Green Willow Textile, told CNBC. For now, the company has production on hold for orders from its U.S. clients. Recent reports pointed to some tariff reliefs on the ground as both governments sought to blunt the economic impacts of punitive tariffs. China reportedly granted tariff exemptions to certain U.S. goods, including pharmaceuticals, aerospace equipment, semiconductors, and ethane imports. In the latest relief, Trump signed an executive order exempting foreign car and parts imports from additional levies, following an earlier rollback of tariffs on a range of electronic products, including smartphones, computers and chips. Despite concerns about profit margins, some businesses are hedging their bets by partially refilling orders from China rather than enduring the sight of empty store shelves, said Tidalwave Solutions' Johnson. "A few factories told me some U.S. importers have instructed them to resume production in an attempt to 'time' anticipated tariff relief," Martin Crowley, vice president of product development at Seattle-based wholesale toy seller Toysmith, said in an email Tuesday. The company's website urges customers to place orders by May 16, for shipping by July 31, "to lock in current, non-tariffed pricing." In the last few days, many factories in the manufacturing centers of Yiwu, Shantou, and Dongguan have received clearance from Walmart and Target to resume production, Crowley added. Walmart and Target did not immediately respond to a CNBC request for comment. Some Agilian customers are also placing relatively smaller orders, betting that tariff rates will decrease by the time their products arrive at U.S. ports. However, in the event of a breakthrough in U.S.-China trade negotiations — and a rush to backfill orders ensues — that could drive up factories' production costs and shipping prices. "It is possible to rush, arrange production faster if quantities are not large … but if all American customers rush at the same time, the factories are going to be overwhelmed and air shipments will be quite expensive," said Anjoran.
Business Mayor
28-04-2025
- Business
- Business Mayor
Chinese factories are stopping production and looking for new markets as U.S. tariffs bite
Textile manufacturing workers in Binzhou, Shandong, China, on April 23, 2025. Nurphoto | Nurphoto | Getty Images BEIJING — Chinese manufacturers are pausing production and turning to new markets as the impact of U.S. tariffs sets in, according to companies and analysts. The lost orders are also hitting jobs. 'I know several factories that have told half of their employees to go home for a few weeks and stopped most of their production,' said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. He said factories making toys, sporting goods and low-cost dollar store-type goods are the most affected right now. 'While not large-scale yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow,' Johnson said. 'There is a hope that tariffs will be lowered so orders can resume, but in the meantime companies are furloughing employees and idling some production.' Around 10 million to 20 million workers in China are involved with U.S.-bound export businesses, according to Goldman Sachs estimates. The official number of workers in China's cities last year was 473.45 million. Over a series of swift announcements this month, the U.S. added more than 100% in tariffs to Chinese goods, to which China retaliated with reciprocal duties. While U.S. President Donald Trump on Thursday asserted trade talks with Beijing were underway, the Chinese side has denied any negotiations are ongoing. The impact of the recent doubling in tariffs is 'way bigger' than that of the Covid-19 pandemic, said Ash Monga, founder and CEO of Guangzhou-based Imex Sourcing Services, a supply chain management company. He noted that for small businesses with only several million dollars in resources, the sudden increase in tariffs might be unbearable and could put them out of business. He said there's so much demand from clients and other importers of Chinese products that he's launching a new 'Tariff Help' website on Friday to help small business find suppliers based outside China. Livestreaming The business disruption is forcing Chinese exporters to try new sales strategies. Woodswool, an athleticwear manufacturer based in Ningbo, near Shanghai, quickly turned to selling the clothes online in China via livestreaming. After launching the sales channel about a week ago, the company said it's received more than 30 orders with gross merchandise value of more than 5,000 yuan ($690). It's a small step toward salvaging lost business. 'All our U.S. orders have been canceled,' Li Yan, factory manager and brand director of Woodswool, said in Mandarin, translated by CNBC. More than half of production once went to the U.S., and some capacity will be idle for two to three months until the company is able to build up new markets, Li said. He noted the company has sold to customers in Europe, Australia and the U.S. for more than 20 years. The venture into livestreaming is part of an effort by major Chinese tech companies, at the behest of Beijing, to help exporters redirect their goods to the domestic market. Woodswool is selling its products online through Baidu, whose search engine app also includes a livestreaming e-commerce platform. Li said he chose the company's virtual human livestreaming option since it allowed him to get up and running within two weeks, without having to spend time and money on renovating a studio and hiring a team. Read More Twitter is down to fewer than 550 full-time engineers Baidu said it has worked with at least several hundred Chinese businesses to launch domestic e-commerce channels after this month announcing it would provide subsidies and free artificial intelligence tools — such as its 'Huiboxing' virtual humans — for 1 million businesses. The virtual humans are digitally recreated versions of people that use AI to mimic sales pitches and automate interactions with customers. The company claimed that return on investment was higher than that of using a human being. Domestic market challenges E-commerce company was one of the first to announce similar support, pledging 200 billion yuan ($27.22 billion) to buy Chinese goods originally intended for export — and finding ways to sell them within China. Food delivery company Meituan has also announced it would help exporters distribute domestically, without specifying an amount. However, $27.22 billion is only 5% of the $524.66 billion in goods that China exported to the U.S. last year. 'A few businesses have told us that under 125% tariffs, their business model is not workable,' Michael Hart, president of the American Chamber of Commerce in China, told reporters Friday. He also noted more competition among Chinese companies in the last week. Tariffs from both countries will likely remain in place at a certain level, with exemptions for certain tariffs, Hart said. 'That's exactly what they're backing into.' Products branded and developed for a suburban U.S. consumer might not directly work for a Chinese apartment dweller. Manufacturers have gone directly to Chinese social media platforms Red Note and Douyin, the local version of TikTok, to ask consumers to support them, but fatigue is growing, pointed out Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. Read More Dutch Court Sentences Five in Attacks on Israeli Soccer Fans Looking outside the U.S. Fewer and fewer Chinese companies are considering diverting exports to the U.S. through other countries, given rising U.S. scrutiny of transshipments, she said. Dudarenok added that many companies are diversifying production to India over Southeast Asia, while others are turning from U.S. customers to those in Europe and Latin America. Some companies have already built businesses on other trade routes from China. Liu Xu runs an e-commerce company called Beijing Mingyuchu that sells bathroom products to Brazil. While his business has run into challenges from fluctuating exchange rates and high container shipping costs, Liu said he expects trade with Brazil will ultimately not be that affected by China's tensions with the U.S. China's exports to Brazil doubled between 2018 and 2024, as have China's exports to Ghana. During the Covid-19 pandemic, Ghana-based Cotrie Logistics was founded to help businesses with sourcing, coordinate shipments amid port delays and build dependable logistics routes, said CEO Bright Tordzroh. The company primarily works in trade between China and Ghana and now makes $300,000 to $1 million annually, he said. The U.S.-China trade tensions have led many companies to explore sourcing and manufacturing locations outside the United States, Tordzroh said, which he hopes can create more opportunities for Cotrie. Weekly analysis and insights from Asia's largest economy in your inbox Subscribe now
CNBC
28-04-2025
- Business
- CNBC
Chinese factories are stopping production and looking for new markets as U.S. tariffs hit
BEIJING — Chinese manufacturers are pausing production and turning to new markets as the impact of U.S. tariffs sets in, according to companies and analysts. The lost orders are also hitting jobs. "I know several factories that have told half of their employees to go home for a few weeks and stopped most of their production," said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. He said factories making toys, sporting goods and low-cost Dollar Store-type goods are the most affected right now. "While not large-scale yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow," Johnson said. "There is a hope that tariffs will be lowered so orders can resume, but in the meantime companies are furloughing employees and idling some production." Around 10 million to 20 million workers in China are involved with U.S.-bound export businesses, according to Goldman Sachs estimates. The official number of workers in China's cities last year was 473.45 million. Over a series of swift announcements this month, the U.S. added more than 100% in tariffs to Chinese goods, to which China retaliated with reciprocal duties. While U.S. President Donald Trump on Thursday asserted trade talks with Beijing were underway, the Chinese side has denied any negotiations are ongoing. The impact of the recent doubling in tariffs is "way bigger" than that of the Covid-19 pandemic, said Ash Monga, founder and CEO of Guangzhou-based Imex Sourcing Services, a supply chain management company. He noted that for small businesses with only several million dollars in resources, the sudden increase in tariffs might be unbearable and could put them out of business. He said there's so much demand from clients and other importers of Chinese products that he's launching a new "Tariff Help" website on Friday to help small business find suppliers based outside China. The business disruption is forcing Chinese exporters to try new sales strategies. Woodswool, an athleticwear manufacturer based in Ningbo, near Shanghai, quickly turned to selling the clothes online in China via livestreaming. After launching the sales channel about a week ago, the company said it's received more than 30 orders with gross merchandise value of more than 5,000 yuan ($690). It's a small step toward salvaging lost business. "All our U.S. orders have been canceled," Li Yan, factory manager and brand director of Woodswool, said in Mandarin, translated by CNBC. More than half of production once went to the U.S., and some capacity will be idle for two to three months until the company is able to build up new markets, Li said. He noted the company has sold to customers in Europe, Australia and the U.S. for more than 20 years. The venture into livestreaming is part of an effort by major Chinese tech companies, at the behest of Beijing, to help exporters redirect their goods to the domestic market. Woodswool is selling its products online through Baidu, whose search engine app also includes a livestreaming e-commerce platform. Li said he chose the company's virtual human livestreaming option since it allowed him to get up and running within two weeks, without having to spend time and money on renovating a studio and hiring a team. Baidu said it has worked with at least several hundred Chinese businesses to launch domestic e-commerce channels after this month announcing it would provide subsidies and free artificial intelligence tools — such as its "Huiboxing" virtual humans — for 1 million businesses. The virtual humans are digitally recreated versions of people that use AI to mimic sales pitches and automate interactions with customers. The company claimed that return on investment was higher than that of using a human being. E-commerce company was one of the first to announce similar support, pledging 200 billion yuan ($27.22 billion) to buy Chinese goods originally intended for export — and find ways to sell them within China. Food delivery company Meituan has also announced it would help exporters distribute domestically, without specifying an amount. However, $27.22 billion is only 5% of the $524.66 billion in goods that China exported to the U.S. last year. "A few businesses have told us that under 125% tariffs, their business model is not workable," Michael Hart, president of the American Chamber of Commerce in China, told reporters Friday. He also noted more competition among Chinese companies in the last week. Tariffs from both countries will likely remain in place at a certain level, with exemptions for certain tariffs, Hart said. "That's exactly what they're backing into." Products branded and developed for a suburban U.S. consumer might not directly work for a Chinese apartment dweller. Manufacturers have gone directly to Chinese social media platforms Red Note and Douyin, the local version of TikTok, to ask consumers to support them, but fatigue is growing, pointed out Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. Fewer and fewer Chinese companies are considering diverting exports to the U.S. through other countries, given rising U.S. scrutiny of transshipments, she said. Dudarenok added that many companies are diversifying production to India over Southeast Asia, while others are turning from U.S. customers to those in Europe and Latin America. Some companies have already built businesses on other trade routes from China. Liu Xu runs an e-commerce company called Beijing Mingyuchu that sells bathroom products to Brazil. While his business has run into challenges from fluctuating exchange rates and high container shipping costs, Liu said he expects trade with Brazil will ultimately not be that affected by China's tensions with the U.S. China's exports to Brazil have doubled between 2018 and 2024, as have China's exports to Ghana. During the Covid-19 pandemic, Ghana-based Cotrie Logistics was founded to help businesses with sourcing, coordinate shipments amid port delays and build dependable logistics routes, said CEO Bright Tordzroh. The company primarily works in trade between China and Ghana and now makes $300,000 to $1 million annually, he said. The U.S.-China trade tensions have led many companies to explore sourcing and manufacturing locations outside the United States, Tordzroh said, which he hopes can create more opportunities for Cotrie.
Time of India
25-04-2025
- Sport
- Time of India
NBA Trade Rumors: Golden State Warriors predicted to bag 6-foot-8 Brookly Nets star forward to strengthen roster around Stephen Curry and Jimmy Butler
Stephen Curry and Jimmy Butler (Image Source - Getty Images) The Golden State Warriors are battling the Houston Rockets in a tight first-round playoff series, but front-office discussions about the offseason are already heating up. One of the biggest decisions revolves around Jonathan Kuminga , whose future with the team appears uncertain. Recent reports suggest the Warriors could explore a sign-and-trade deal involving Kuminga, potentially sending him to the Brooklyn Nets in exchange for sharpshooting forward Cameron Johnson . Why Jonathan Kuminga's Time with the Golden State Warriors May Be Ending Kuminga, the No. 7 pick in the 2021 NBA Draft, is set to become a restricted free agent this summer. His expected salary—around $25 million per year—puts the Warriors in a tough financial spot. Adding to the uncertainty, Kuminga's relationship with head coach Steve Kerr has reportedly soured. His reduced role in the playoffs signals a possible exit. Key Factors in Kuminga's Potential Departure: - Contract demands: $25 million per year could strain Golden State's payroll. - Fit concerns: Kuminga's skills don't fully align with the Warriors' system. - Playing time: His playoff minutes have dwindled, raising questions about his future. The Proposed Trade: Jonathan Kuminga for Cameron Johnson A potential sign-and-trade deal could send Kuminga to the Brooklyn Nets in exchange for Cameron Johnson, a proven scorer and reliable three-point shooter. Trade Breakdown: Warriors Receive Nets Receive Cameron Johnson Jonathan Kuminga - 2029 1st-round pick (top-5 protected) Why This Trade Makes Sense for Both Teams An NBA Playoffs First Round Check-In With Steve Nash and Cam Johnson For the Golden State Warriors: - Johnson is a better immediate fit alongside Curry, Butler, and Green. - His three-point shooting (39% on 7.2 attempts per game) spaces the floor. - Strong defensive presence adds versatility. For the Nets: - Kuminga offers long-term upside for a rebuilding team. - A future first-round pick provides additional draft capital. As ClutchPoints' Ben Cooper noted: "Kuminga has shown flashes during his career and could develop and reach his full potential on a team like the Nets. For Golden State, adding a 3-and-D forward in Johnson would fit well in a lineup alongside Stephen Curry , (Jimmy) Butler, and Draymond Green." Cameron Johnson's Impact on the Golden State Warriors Johnson, 29, had a strong season despite Brooklyn's struggles, averaging: - 18.8 points per game - 4.3 rebounds - 3.4 assists - 39.0% three-point shooting His ability to stretch the floor and defend multiple positions would make him an ideal fit in Golden State's system. How Johnson Elevates the Golden State Warriors: - Reliable scoring: Provides a consistent third option behind Curry and Butler. - Floor spacing: Opens driving lanes for slashers like Andrew Wiggins. - Defensive versatility: Can guard wings and smaller bigs effectively. If the Warriors want to remain in title contention, they'll need to make tough roster decisions. Trading Kuminga for a proven contributor like Johnson could be the move that keeps them competitive. Also read: NBA Trade Rumors: Los Angeles Lakers could sign $238 million Utah Jazz superstar to form Big 3 with LeBron James and Lukia Doncic As the offseason approaches, all eyes will be on Mike Dunleavy and the front office to see if they pull the trigger on this deal.
