Have Trump's tariffs killed Christmas? China factories reel as orders axed during vital pre-order season
Christmas decoration suppliers should have received their first orders for trees and ornaments by now.
But they haven't.
Chinese producers of plastic Christmas trees and other festive decorations say orders from US clients, which are crucial for their business, have stopped amid a tariff tit-for-tat tariff announcements.
President Donald Trump has raised tariffs on Chinese imports by 104 percent so far this year in an escalating trade war that threatens great pain for the world's largest exporter of manufactured goods. China responded with an 84 percent tariff on US goods, too.
US retailers are almost completely reliant on China for Christmas decorations, where they source 87 percent of the holiday's goods — worth roughly $4 billion.
Chinese factories are also heavily dependent on the US market, where they sell half of what they make.
If Americans want new Christmas decorations this year, they will have to pay a lot more for them - if they can find them on the shelves at all.
'So far this year, none of my American customers have placed any orders,' said Qun Ying, who runs an artificial Christmas tree factory in the eastern city of Jinhua.
Christmas decoration manufacturers are worrying tariffs might thwart their business models
'Of course it's about the tariffs. By mid-April all the orders are normally finalized, but right now ... it's hard to know if any orders are coming. Maybe American customers won't buy anything this year.'
In Shaoxing, some 160 kilometers (100 miles) away from Jinhua, factory owner Liu Song was confident his business can cope by trying to sell more to Russia, Europe and Southeast Asia, which together take 75 percent of his products already.
'We are worried that US orders will come down,' he said, while adding: 'We will definitely win this trade war.'
Jessica Guo, who also manages a Christmas tree factory in Jinhua, said she was just notified by an important US customer that it is pausing a $408,191 order for which she had already spent $54,000 on materials.
She expects that order will soon be canceled and worries about her business.
'My peers and I rely on US orders to survive,' Guo said. 'This will inevitably affect a lot of people. No one can escape.'
Economists say the trade war will shave 1 to 2 percentage points off Chinese economic growth this year, exacerbate industrial overcapacity issues, threaten jobs, and further fuel deflationary forces.
But the war could hit American consumers even harder: more than 16 percent of American products are shipped from China.
Experts have said that the price of goods, including Chinese-made toys, will skyrocket
Grocery prices will likely be among the first consumer items to see price hikes
Christmas decoration manufacturers said they should have already received their first orders for the 2025 holiday season
As Chinese exporters sell less to the US, which last year bought goods worth more than $400 billion, they will have to compete ever more intensely on prices in other markets.
This will hit their already-thin profit margins and force them to cut costs at home, economists say.
Guo's 10,800-square meter (116,250-square foot) factory employs 140 people regularly, but that number can hit 200 in peak production season over the summer. This year she does not expect to need extra workers.
'Losing the U.S. market will definitely impact many people´s jobs,' said Guo.
Domestic demand for Christmas decorations in China is insignificant, she added.
Silent Nights
Sourcing from countries other than China will be difficult. The second-biggest exporter of Christmas decorations to the US is Cambodia, which makes 5.5 percent of the goods, and last week Trump imposed a 49 percent tariff on Cambodian imports.
Shifting production to the U.S., one of Trump's goals in imposing tariffs on China and almost every other country in the world, is not feasible, says Jami Warner, executive director of the American Christmas Tree Association.
'They certainly can't be made in the United States. There's no manufacturing, the technology isn't here, the labor market isn't here,' said Warner.
Warner, who expects significant, but hard to estimate, price increases, says 80 percent of all Christmas trees displayed in the US are artificial.
The pre-lit trees, which is most of them, are only made in China.
She decries her industry becoming collateral damage in a geopolitical fight.
'What our members make and sell are not strategic products,' said Warner.
'We're not threatening. We're a happy, joyful business. We'd like to stay in that joyful business.'
