Politics is temporary, business is permanent


This second wave of tariffs has been interrupted pending the outcome of a long trade summit between the United States and China. Any decision made will have enormous consequences for producers and consumers, who may see prices rise and investments differ. This could lead to lower growth, a downturn in stock markets and a loss of jobs, particularly in the high-productivity, low margin component sector.

Some Chinese companies at CES are reluctant to talk about what might happen in the coming weeks. An American employee of a Chinese company said his CEO had told them everything to avoid talking politics at the show. Similarly, several other companies did not wish to speak publicly about the issue. The implication was that they could face retaliation from Beijing for hiring a journalist.

"[a trade war] would be bad for us all and we would all hurt. "

Breswell Su, sales manager of a large Chinese electronics conglomerate, said the tariffs were a "major concern". He explained that, "the economic situation becoming intense", the imposition of customs duties will be just one of many problems. A decline in the value of the yuan, for example, will increase costs and reduce the already thin margins of the industry. He added that companies will seek to survive with minimal margins and will try to recover their losses by pushing stronger in other territories.

Employees of a Shenzhen-based battery and headphone manufacturer felt the trade war would not affect them. Representatives said their products could avoid tariffs as they are shipped via Hong Kong. From there, the material is delivered to an Amazon warehouse, which fulfills its obligations in terms of shipping.

Schumacher Electric produces battery charging equipment and has manufacturing facilities in China, Mexico and Belgium. Linh Nguyen, product engineer, said that if duties were imposed, his company will simply ensure that imports of equipment into the United States come from the Mexico City factory. "The policy is temporary," he added, stressing that the situation could change tomorrow. It is therefore the responsibility of companies to be flexible.