Escalation in US-China trade war is bad news for HK’s ailing truckers and worst is yet to come, warns leading figure in logistics industry

15-May-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

The escalation in the trade war between the United States and China means more bad news for Hong Kong’s beleaguered logistics sector, a leading industry figure has warned.

Stanley Chiang Chi-wai, chair of Lok Ma Chau China-Hong Kong Freight Association, said the truck and logistics business would take a fresh battering, hours after Beijing hit back at Washington’s abrupt decision to lift tariffs on $60 billion worth of American goods.

Predicting that the worst was yet to come for the ailing industry, Chiang said drivers had told him business was down by as much as 50 per cent compared with last year.

In response to the new tariffs, the industry has called for the Hong Kong government to temporarily waive licence fees of about HK$5,000 annually for container trucks and trailers, and rates and rents for container truck parks near the Kwai Tsing container port, the association chair said.

“I have heard from more than 200 drivers that their business declined by between 30 and 50 per cent between Lunar New Year and now, from the same time last year,” Chiang said. “The worst is yet to come now [President] Xi [Jinping] has touched the nerve of [US President Donald] Trump in hitting back at [Trump's] tariffs last week.”

On Monday night, China unveiled a plan to raise most parts of $60 billion worth of American goods already imposed with tariffs, to 25 per cent on June 1.

The tariffs in question involve 2,493 US goods that will be hit with a 25 per cent tariff; 1,078 items with a 20 per cent tariff; 974 items with a 10 per cent tariff; and 595 items with a 5 per cent tariff.

The items with the highest levies include consumer goods such as cooking oils, frozen vegetables, wine, beer and other beverages, and raw materials such as chemicals, textiles and garments, jewellery, metal products, machinery components and home appliances.

The Ministry of Finance said the tariffs were in response to the US’ unilateral move on trade, and urged Trump to return to the negotiating table after he raised the 10 per cent tariffs on $200 billion worth of Chinese goods to 25 per cent last Friday.

Trump threatened to impose the same extent of tariffs on the rest of Chinese exports to the US, valued at $300 billion.

“We call for the two economic superpowers to work out a deal soon. Our situation is getting worse,” Chiang said.

Trading and logistics is one of Hong Kong’s four pillar industries, together with tourism, financial services, and producer and professional services.

Its economic growth weakened to the slowest pace in a decade at 0.5 per cent, year-on-year, in the first three months of this year. During the period, the city, which plays an entrepot role in US-China trade, saw its imports decline 3.2 per cent and exports shrink 2.4 per cent.

Dennis Ng Wang-pun, president of the Chinese Manufacturers’ Association, said about 20 per cent of Hong Kong factory owners across the border were trading with the US market.

“The chance of seeing all the Chinese goods be imposed with 25 per cent tariffs is high, which will affect the livelihoods not only of these factory owners, but of other companies in the supply chain,” he said. “There is a chance some Hong Kong companies may not survive, and go under.”

He urged Hong Kong companies to explore other markets and the domestic market in mainland China.

The American Apparel and Footwear Association, which represents 1,000 major brands across the US, said Trump’s move to propose tariffs on $300 billion worth of Chinese goods including clothing, shoes and garments on Monday, would be catastrophic for the country’s economy.

President and CEO Rick Helfenbein said it was a self-inflicted wound that would cost a family of four an additional $500 a year to cover tariffs on clothing, shoes, travel goods and related items.

The cost per family could go up to $2,300 annually to cover the tariffs on all items.

https://sg.news.yahoo.com/escalation-us-china-trade-war-045551746.html

 


Category: Hong Kong

Print This Post