Donald Trump’s tariff hit: How Chinese firms are looking at Indian exporters to maintain their US clientele
NEW DELHI: China-based enterprises, impacted by escalating US tariffs imposed under Donald Trump administration, are seeking assistance from Indian exporters to maintain their American clientele amid significant disruptions in global trade.
During the recently concluded Canton Fair in Guangzhou (May 5), several Chinese firms approached Indian companies to help fulfil US customer orders, according to Ajay Sahai, Director General of the Federation of Indian Export Organizations (FIEO), as reported by Bloomberg. Indian firms are expected to receive commissions for facilitating these transactions.
The US has imposed tariffs of up to 145 per cent on Chinese exports, while Indian goods currently face a 10 per cent levy, scheduled to rise to 26 per cent in July if President Donald Trump implements reciprocal tariffs after a 90-day pause.
Previously, Chinese exporters had established operations in Vietnam or routed goods through Thailand to reach US markets. However, Trump’s imposition of 46 per cent tariffs on Vietnam has limited these alternatives, potentially opening up more opportunities for Indian exporters.
Due to India’s restrictions on Chinese investments, Chinese firms cannot establish operations or use India as a mere transit point. Instead, Chinese companies at the Canton Fair proposed that Indian firms supply goods under Chinese brands or through co-branding arrangements, Sahai said.
Enquiries primarily came from sectors such as hand tools, electronics, and home appliances. Sahai noted that direct negotiations between US customers and Indian suppliers are also likely, with commission structures for Chinese firms determined during buyer-supplier discussions.
“Some four to five companies have approached us,” said Siddhant Aggarwal, export officer at Jalandhar-based OayKay Tools, a manufacturer of drop forge hammers and cold stamp machines. “They have a brand name to maintain, so they need to service their customers.”
India’s growing export opportunities coincide with advancing trade discussions with the Trump administration. During a recent visit to India, US Vice President JD Vance reaffirmed prospects for a bilateral trade deal, targeted for completion by autumn.
Meanwhile, US-China tensions over tariffs remain high. Beijing has dismissed the high levies as “meaningless,” while Trump claims negotiations are ongoing. However, China denies any active discussions, reiterating demands for the removal of unilateral tariffs.
While American attendance was relatively low at the start of the Canton Fair, tariff concerns dominated discussions. Many Chinese firms, facing the 90-day grace period, accelerated investments in Southeast Asia to bypass US restrictions.
Jalandhar-based Victor Forgings, established in 1954, is optimistic about growth amid the evolving trade landscape. Managing Partner Ashwani Kumar said the company has been approached by both Chinese suppliers and US firms with Chinese operations seeking alternatives due to supply chain disruptions. Kumar also revealed plans to set up two new manufacturing units to meet rising demand, noting that American firms are willing to share technical expertise to help Indian manufacturers expand capacity.
Meanwhile, in its trade war with US, China asserted on Monday that it maintained a righteous position in its ongoing trade dispute with the United States. The US levied a substantial 145 percent duty on its primary competitor, whilst China retaliated with a 125 percent duty on American products.
During a press conference, senior Chinese economic official, Zhao Chenxin, warned that the US trade conflict would have adverse consequences. “We firmly believe that if you are against the world and the truth, you will only isolate yourselves. Only by travelling with the world and with morality can we win the future.”
According to AFP, Chenxin criticised the US for its unilateral actions and intimidation tactics, stating they created “cards out of thin air, bully and go back on their word.”
Additionally, Beijing announced enhanced measures to protect China’s declining economy from the effects of this confrontation. Chenxin further declared China’s commitment to persist “to the end.”
Read more: China claims it is on the ‘right side of history’ in escalating trade war with US
