Trump’s Tariffs Are the Talk of the Canton Fair

The ongoing trade war initiated by U.S. President Donald Trump against China, primarily through a series of escalating tariffs, has heavily impacted the 137th Canton Fair, China’s leading trade expo. Vendors report a notable absence of American buyers, highlighting the trade fair’s diminished U.S. presence in 2025. Wu Ping, a vendor from Ningbo, stated that none of his American clients attended the fair’s spring session, which began on April 15 and ends on Monday. Similarly, Pan Na, head of a company in Anhui province, has only received inquiries from her U.S. clients via email, with key customers concerned about whether Chinese factories have ceased operations due to increased tariffs [para. 1][para. 2][para. 3].

Since February 4, the Trump administration’s cumulative tariffs on Chinese imports have soared to 145%, with some products now facing tariffs up to 245%. In retaliation, China has imposed its own set of levies, reaching 125% on some U.S. goods, effectively locking the two countries in a contentious tariff war [para. 4]. These measures have put immense strain on U.S. clients, especially as orders for the Christmas season reach the delivery phase. U.S. buyers face a dilemma: shipping now means incurring high tariffs and sharply higher prices, while delaying could result in losing critical sales opportunities. Chinese exporters and their American clients are trying to manage orders to minimize the impact, but absorbing the additional tariff costs now seems inevitable [para. 5][para. 6].

Many American buyers anticipated further tariff hikes, especially after Trump’s re-election, and thus attempted to stockpile goods in advance. This preemptive action resulted in a 12.8% year-on-year surge in U.S. imports from China in December, followed by another 20% increase in the first two months of 2025, according to Sinolink Securities [para. 7][para. 8]. U.S. clients also extended their inventory cycles, with some moving from a 45-day to a 90- or even 120-day "safe stock cycle" to mitigate disruptions [para. 9]. Some buyers have arranged for Chinese sellers to store finished goods in Chinese factories or bonded warehouses in the U.S., delaying customs clearance (and tariff payment) while awaiting further trade developments. Others have shipped stock to Canada or Mexico, to later re-export to the U.S., in attempts to skirt direct tariffs [para. 10][para. 11].

The increased tariffs are taking a toll on U.S. consumers. An April 10 report from the Yale Budget Lab estimates the U.S.’s average effective tariff rate has reached 25.3%—the highest since 1909—potentially adding $4,400 per year to the average U.S. household expenses. Vendors predict that the impact on consumer prices will become evident within two months [para. 12][para. 13].

Some Chinese firms have attempted to bypass tariffs by relocating production to countries like Thailand, but these efforts have encountered problems like immature supply chains and higher costs—production costs in Thailand ended up being 15% higher than in China [para. 14]. As for logistics, U.S. tariffs are generally calculated based on the Free on Board (FOB) value. This bases duties on pre-shipment costs only, with further retail prices inflated by logistics, tariffs, and distributor markups [para. 15][para. 16]. An example given indicates that a 145% tariff on a product with a 10-yuan FOB value and a 50-yuan retail price would increase the final retail price by 29% [para. 17]. Usually, under FOB, buyers bear more of the tariff cost, sometimes sharing it equally with suppliers if margins allow [para. 18][para. 19].

Walmart has resumed shipments from Chinese suppliers after an initial pause, absorbing some of the added costs itself; tariff responsibilities differ between Free on Board and Delivered Duty Paid (DDP) arrangements between buyer and supplier [para. 20][para. 21][para. 22][para. 23].