TEHRAN, August 28 - Faced with plunging U.S. orders, surgical glove maker Ren Jiding is hunting for new markets amid Chinese government calls to reduce reliance on the United States. But none can absorb the 60 percent of his sales that went to American customers last year.
TEHRAN, Young Journalists Club (YJC) - "Other countries import much less than the United States," said Ren, a co-owner of Hongyeshangqin Medical Science and Technology Co., Ltd. in the eastern city of Zibo.
From medical products to smartphone chips to soybeans, Beijing is responding to President Donald Trump's tariff hikes by pushing companies to trade more with other countries. But there are few substitutes for the United States as an export market and source of technology for industries including telecom equipment makers Chinese leaders are eager to develop.
Beijing has announced tariff cuts and other changes while rejecting U.S. demands to scale back plans such as "Made in China 2025," which calls for state-led creation of Chinese champions in robotics, biotech and other fields. American leaders say those violate Beijing's market-opening promises and might erode U.S. industrial leadership.
The response highlights the cost the ruling Communist Party is willing to pay in lost sales and jobs to stick to plans that are fueling conflict with Washington, Europe and other trading partners.
"China sees its technology and industrial policies as fundamental to its growth," Tianjie He of Oxford Economics said in an email. "It is thus hard to see China's leadership committing to significant changes."
Trump has raised duties on a total of $50 billion of Chinese imports including ultrasound scanners and industrial components that Washington says benefit from improper policies. China retaliated with similar penalties.
The U.S. is poised to raise duties on $200 billion of imports including the gloves made by Ren's company. Beijing has issued a list of American goods for retaliation.
The impact on China is "small and is containable, at least for the time being," said Vincent Chan of Credit Suisse. He said the "worst case" outlook if all threatened U.S. tariff hikes go ahead would cut China's growth by 0.2 percentage points this year and 1.3 percent in 2019.
Chinese leaders have tried to cushion the blow to their own economy by targeting American goods its importers can get from other countries — soybeans from Brazil, gas from Russia, cars from Germany and fish from Vietnam.
Beijing has promised to use revenue from the higher tariffs to help struggling exporters and has ordered banks to lend more freely to them.
The biggest jolt so far came from Beijing's cancellation of orders for soybeans, the biggest American export to China at $21 billion last year. That hammered farm states that voted for Trump in the 2016 election. It also pushed up prices for Chinese farmers that use soybeans for animal feed and food processors that crush them for cooking oil.
That could be a windfall for Brazil. But China already is its top market and consumes two-thirds of the global supply. Chinese total imports last year of 95 million metric tons were 50 percent more than the South American giant's entire exports.
"The Chinese can talk all they want about finding other sources of soybeans," but 80 percent come from the United States, Brazil and Argentina, said Michael Cordonnier, president of Soybean & Corn Advisor, Inc., a U.S. research firm.
Source: AP
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