Yiwu, a bustling city just a few hours away from Shanghai by train, is known for producing nearly two-thirds of all Christmas decorations worldwide. Every Sunday, traders from all over the world can be found in Yiwu Market, searching for samples of festive decorations. Typically, orders start arriving in April, with factories working on them and containers being loaded for shipping by July.

However, this year, the industry is experiencing a slowdown. Zhang Xiu Fang, the owner of New Di Man Christmas Craft shop, notes that American customers are hesitant to place orders due to President Donald Trump’s trade tariffs against China. Imports now face a levy of at least 20%, affecting China’s manufacturing sector, including the production of toys, clothes, solar panels, and plastic bowls.

Yiwu is at the center of this trade, with its International Trade City, also known as Yiwu Market, being the world’s largest small commodities market. Christmas paraphernalia only occupies a small portion of the market, which spans an area equivalent to over 500 football fields and houses around 70,000 shops and stalls. The market attracts traders from all over the world, offering a wide range of products from drones to socks.

Locals in Yiwu are not impressed by the potential trade war between the world’s top two economies. China’s trade surplus has reached a record $1 trillion in 2024, thanks to exports worth $3.5 trillion. Exports have become even more important to support China’s economy, although prolonged tariffs could lead to a drop in exports to the U.S. by up to a third, according to economists. Many American retailers are hesitating to replenish their stocks, and even if tariffs are reduced, diminishing supplies could result in higher prices. Albert Hu, an economics professor, believes that American consumers will ultimately bear the cost of these tariffs.

Source: https://time.com/7272434/trump-trade-war-us-tariffs-china-yiwu-market/