Trump tariffs dim the lights in China's Christmas town

Trump tariffs dim the lights in China's Christmas town

Yiwu, China - For millions of Americans, it's a familiar, beloved image: snow falling outside, Christmas music playing as families decorate their homes with lights, stockings and a star on the tree. But many people are unaware of where these iconic Christmas items come from.

Christmas goods from Yiwu

Most of these items come from a single city in Zhejiang Province, China: Yiwu, affectionately referred to as “Christmas City.” The city supplies nearly 90% of all decorative Christmas goods used in the United States, according to state media. Many of these products come from the largest wholesale market in the world in Yiwu.

The labyrinth of Yiwu

This labyrinthine complex covers nearly 1,000 acres, the equivalent of approximately 750 football fields. Inside, foreign shoppers roam narrow aisles overflowing with goods from piano-playing Santas to artificial Christmas trees and countless other items destined for American households, including "Make America Great Again" hats, massagers and folding camp chairs.

A worrying trading environment

However, there is currently a wave of concern. These sellers are on the front lines of global trade and are now struggling with triple digits Tariffs imposed by President Donald Trump. Those tariffs have sent shockwaves around the world and shaken long-standing ties between the U.S. and China, two superpower economies.

Total tariffs on China now exceed a staggering 145%, the highest U.S. trade penalties in nearly a century. These measures have already cost many sellers customers, drastically reducing their profits and forcing them to turn to other markets. During a CNN visit to the market, many vendors expressed concern and confusion over Trump's actions, but also expressed a desire for a peaceful resolution as they piece together the fragments of their disrupted business operations.

Customer loss and economic challenges

"Some of our long-time customers have stopped doing business with us, and that makes us very sad," said Ran Hongyan, 43, who has been selling Christmas decorations for 15 years. After the tariffs took effect, she offered her American customers a discount in an attempt to salvage the relationship - but to no avail. Eight out of 10 canceled their contracts this year, a loss of more than $135,000.

The global impact of the trade war

The cost of the trade war affects not only sales but also the mentality of consumers. Uncertainty over tariffs and future trade relationships is causing many countries to spend less - and that has a direct negative impact on the Yiwu market.

As presidents fight trade wars, sellers in Yiwu are worried about the future. Thoughts about their business and the uncertainties that this situation brings are omnipresent. The fates of these small businesses are deeply tied to the U.S.-China trade relationship.

"We want peace in the world. From my perspective, I really can't understand why they would do that," said Li Xinyao, who has been in the imitation flower business in her family business since 1993. “Americans always influence the world – if they start the trade war, everyone will be worried and our customers may cancel their orders.”

Ongoing global trade tensions mean markets remain fluid and consumers may hold back on spending. Such a situation could have a devastating impact on people in Yiwu whose livelihoods depend on foreign customers, especially in the run-up to Christmas.

The transition to new markets

For many sellers whose customer base is heavily anchored in the US, Trump's trade war means they must now look for new opportunities. The idea of ​​decoupling, where two countries have virtually no trade or investment, has been discussed in U.S.-China circles for years, although such a historic break would cause great pain to both deeply interconnected economies.

The sellers in Yiwu are now adapting to the changes and looking for new trading partners in Europe or domestically. “I am now redirecting all the goods stopped by my US customers to the EU,” said Nie Ziqin, 39, who sells Halloween decorations.

A look at the future

Although there is uncertainty about the future, there remains hope that the trade disputes will end soon. Sellers in Yiwu are hoping for an agreement between the two countries' leaders that could restore long-standing ties. But given the tense global economic situation, it remains unclear whether these markets will ever look the same again or whether long-term customer relationships can ever be restored.

“When we go shopping every day, if we want to buy a sack or everyday items, we now think about whether these products were imported from the United States,” explains Ran, the Christmas decoration saleswoman. And if those goods are American: “I will definitely choose not to buy them.”