Some Companies Struggle to Find Manufacturing Countries to Replace China
With Donald Trump's return to the White House confirmed, reports have emerged that American companies are stockpiling Chinese products. This is because Trump has pledged to impose a 60% "bomb tariff" on all Chinese imports.
According to the Wall Street Journal (WSJ) on the 20th (local time), some companies in the U.S. are accelerating preparations ahead of the launch of Trump's second administration by pre-ordering products to cover sales for several months up to a year. This is to build up as much inventory as possible before Trump takes office on January 20 next year.
Bear Botanics, a skincare product company based in Wisconsin, is a representative example. Founder Jason Juno reportedly contacted Chinese suppliers immediately after Trump's election victory was confirmed on the night of the 6th. Juno, who imports and sells exfoliating gloves and other products from Chinese manufacturers, said he placed a single order worth $50,000 (about 69 million KRW) ? equivalent to one year's inventory ? on that day.
He expressed hope that the approximately 30,000 products ordered before Trump's inauguration would all arrive safely, noting that there is a strong possibility that Trump will aggressively push his pledge to impose a 60% tariff on all Chinese goods.
This is not the first time American companies have increased their purchases of Chinese products in preparation for the U.S.-China trade war. When Trump's first administration launched a "tariff war" against China in 2018, some U.S. companies hurriedly stockpiled Chinese products before the newly introduced high tariffs took effect.
As a result, the U.S. trade deficit with China in 2018 actually widened compared to the previous year. The deficit began to shrink from the following year when the trade war intensified.
The WSJ reported that American companies, having already experienced the Trump era once, are quickly revisiting their past strategies as his return approaches. However, the WSJ also predicted that if Trump actually takes office and imposes large-scale tariffs on Chinese goods, many companies will eventually have to raise consumer prices.
Some companies are reportedly struggling to find alternative manufacturing countries to China, such as in South America, Cambodia, and Vietnam.
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