Collateral damage from Trump’s tariff war

Jason Clarke’s business selling quartz for kitchens to Australia from China has collapsed because of the trade war with the US.

China-based British businessman Jason Clarke.

Jason Clarke’s business selling quartz for kitchen benchtops to Australia from China has collapsed as a result of the trade war with the US.

The Guangzhou-based British businessman, who buys quartz from China he onsells to Australia and Britain for kitchens, closed his business after the local factory where he bought his supplies shut down because of higher US tariffs, laying off 600 workers.

“My supplier was doing about $US40 million a year in business with American customers,” he said. “I used to give him about $US3m to $US4m in business a year, for my sales to Australia and the UK, but the business from the US dwarfed that.”

In July, his supplier’s sales to the US were hit by a double whammy of higher tariffs from President Trump’s trade war and a successful anti-dumping case taken in the US by a US quartz supplier.

“The two things added up to a price increase of about 60 per cent on quartz from China,” he said. “So the entire industry here closed down overnight because the Americans just shut the door.”

Mr Clarke said there were about 10 factories he knew of in Guangzhou making quartz for export to the US that were forced to close almost overnight as a result of the higher tariffs, laying off thousands of workers. He said businesses were in the process of moving their operations to Malaysia and other countries in Southeast Asia.

Mr Clarke said there was an increasing atmosphere of uncertainty in the Guangzhou area, one of the manufacturing powerhouses of China, as private companies and family- owned businesses, such as his supplier, braced themselves for waves of new tariffs from the US.

“The business is a microcosm of the industries being destroyed here,” he said. “It is all happening so quickly, which is what is so frightening. It’s already happening to other industries.

“It is a situation which will snowball every time more tariffs from the US are announced or threatened.

“Everyone panics and asks, ‘What is happening?’’’

China has been hit with successive waves of higher tariffs from the Trump administration this year.

An initial round of 25 per cent tariffs on $US60 billion of Chinese exports to the US was put in place earlier this year, followed by tariffs of 10 per cent on $US200bn worth of goods that came into force last week. President Trump has threatened to increase the latest round of tariffs to 25 per cent and impose tariffs on another $US260bn worth of Chinese exports if China retaliates. That will effectively see tariffs on almost all of China’s $US500bn worth of exports to the US, raising questions for almost all Chinese suppliers of goods to America.

Mr Clarke said manufacturing companies in the area supplying American customers were increasingly worried about their future.

“Everything is coming out thick and fast on Twitter, you can’t keep up with it. It all depends on the latest tweet from our dear friend in America,’’ he said.

“The problem is that you don’t know. They use a number of $US60bn or $US200bn, but they don’t specify what products.’’