Tariff uncertainty shapes annual fair in Hong Kong

Tariff uncertainty shapes annual fair in Hong Kong

An annual global trade fair has started in Hong Kong and offers an impressive spectacle with flexible robots, sparkling new products and enthusiastic crowds that fill the exhibition halls.

The shadows of the trade wars

But the uncertainty about the course of the US Chinese trade war throws a shadow about what is usually a positive trade event for the exhibitors, mostly manufacturers from China. In a rapidly escalating trade dispute, US President Donald Trump has the tariffs on Chinese imports to increased. China has in turn with a broad in American goods Reacts. According to several exhibitors, these power games between the two largest economies in the world endanger the global economy.

The challenges for companies in the region

for Liu Tongyong, a sales manager of a company based in the industrial heart of South China, which produces keyboards and computer mice, are difficult times. His company, Gaoxd Precision Industry, is based at the Dongguan production point and benefits from the networked trade between the USA and China. But the escalating trade war meets the company hard.

On Friday, a message from the US COLLE and border protection showed that some electronic products, including smartphones and semiconductors that are imported into the USA href = "https://www.cnn.com/2025/04/12/Tech/trump-electronics-china-tex.html"> Excluded by Trumps "mutual" tariffs. The white house later specified that these exceptions be temporarily . However, the keyboards and mice produced by Gaoxd do not seem to be under the exceptions.

The pressure on the manufacturing increases

At GAOXD, sales have dropped by about 20% since the beginning of the year due to the uncertain economic situation caused by the trade war, Liu in conversation with CNN. "Everyone is waiting. If they sit in stocks, it is unlikely that they will soon be given up new orders," he said.

Since the US market is 30% of the company's sales, Liu has reported that the tariffs increase the pressure to further reduce costs. "There is simply no more scope to continue to push the unit prices. After all these years, the Chinese production has already pressed the costs to the border," he said.

A shift in production abroad does not seem to be a practical option, since the missing supply chain and the ecosystem abroad could continue to drive up costs, added Liu.

Hope for stability

For the moment, Liu hopes that companies like his turbulence can survive. "People just see if there is any signs that the situation will soon calm down," he said.

While Trump has increased the tariffs on China in the past few weeks, he has repeatedly expressed his wish to have talks with the Chinese leader Xi Jinping. Beijing, on the other hand, has taken an arrogant attitude and promised to "react in the same way" to Washington's "one -sided bullying", while it still maintains trade talks.

uncertain future for business partners

It remains unclear whether or when there will be a trading meeting between the two superpowers. Sky Wing Communication Electronics, another exhibitor from Dongguan who produces acoustic products for mostly American and European customers, expressed similar concerns such as Gaoxd.

"Due to certain state factors, we have to assume as a company," said Sky Wing, Frank Zhang. "We can only wait for this policy to stabilize and then search for various ways to overcome these challenges."

The American customers of Sky Wing, who make up at least 30% of their sales, are negotiating about price reductions and even the exposure of orders, said Zhang.

The company has also put its expansion into Kambodia on hold due to the uncertainty about Trump's “mutual” tariffs. Cambodia previously lost 49% of these tariffs, which Trump dropped 90 days last week.

strategies for diversification

In order to combat the possible effects of tariffs, Zhang said that the company would explore new markets, as in the Middle East, to diversify beyond the United States. However, he emphasized that the "best news" for both the company and for its US customers would be the reduction in tariffs.

Companies worldwide that rely on China's production and efficiency as well as the rich workforce must make adjustments, says Bill King, President of Atron Electro Industries, a Canadian company that receives lights and electronic products from China and sells them to North America. "There will be a lot of pressure and it will be difficult to see how the world will change, because now adaptations have to be made all over the world," he said.