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A sourcing agent in Weihai with 30 years’ experience says Chinese factories are reacting quickly to a world where ‘all new orders from the USA have stopped’ thanks to the 145% tariffs imposed on Chinese goods entering the States.
In his capacity as the General Manager of Weihai Towa Outdoor Products, Jack Sun (below) has connections with hundreds of factories in the world’s biggest tackle manufacturing city. He has told Angling International that, alongside the cancelled orders, thousands of factories have US products already on the production line that have little prospect of being shipped once they are ready to leave.
Weihai Towa Outdoor Products specialises in sourcing fishing tackle and outdoor products for European brands and Sun is well connected with manufacturers in all areas of tackle production. Angling International spoke to Sun in mid-April a day after he had been speaking with counterparts in the industry.
Sun said: “I was speaking to tackle factories and agents that have US customers and they say all new orders from the USA have stopped. Current production can not stop, but shipping of those products has been postponed, and postponed indefinitely.
“These are OEM and ODM products for specific markets and specific customers so they can not be sold anywhere else. But they will not be leaving China for the US any time soon.
“My estimation is that 30-40% of Chinese tackle factories have US products on the production line with no prospect of them being shipped.”
Because of the uncertainty caused by the tariffs, Sun says tackle factories in Weihai are already pivoting away from the USA to seek customers in Europe, Australia, other parts of Asia and from within the Chinese domestic market. But these are not easy solutions.
Sun said: “I have been receiving lots of calls since last month from tackle factories asking for my suggestions. Most factories spread their customers across different global markets, even specialists aim for a 60/40 split. But it’s still not easy to switch and make up the difference because it involves product differentiation and investing in things like tooling and moulds to fully adapt.
“As far as the Chinese domestic market is concerned, it’s growing and the competition is quite strong, but factories have no choice but to try. The feeling is that this trade war is going to go on for a long time.”
And what is the general attitude of Chinese factory owners? Added Sun: “They are trying to stay calm, but there is undoubtedly some nervousness. If the tariffs were at 10%, there would be the possibility of splitting the costs with customers, but where we are now means that’s not possible for anyone. These levels are beyond all our imaginations and the world has stopped.”
That nervousness is mixed with hope and also a quiet determination, added Sun. “The vast majority believe that we can cope and win the tariff war because the US only accounts for 15-20% of China’s exports and China has more cards to play. The US is facing more difficulties than China at the moment and all the tariff problems will ultimately be passed on to US consumers to bear.
“Probably 30% of businesses – including those in the tackle trade – just have to wait. But we do have a national culture of being patient and being prepared for a protracted war. The feeling is that Donald Trump’s strategy has always been to push to the limit and then bargain. You only have to look at how things changed with Canada.
“Plus in the short term what Donald Trump may have done is trigger changes in regional economic trade relations from which China and Europe should seek new opportunities for cooperation.
“Until then, we are prepared. The message of our domestic media is, prepare yourself for a long-term battle.”
