SHANGHAI-A number of people at the China International Rubber and Plastics Fair expressed concern about the deepening trade friction between China and the United States and the possibility of the two countries imposing high tariffs on trade in their respective plastics industries.
Cui Xiaojun, executive officer of the KraussMaffei Group in China, a German injection molding machine machine manufacturer, said: "If the trade war does start, we will be affected. We are ready. But, as you know, these are only discussions. So far, nothing has happened."
In particular, those participants in the discussions who are closely related to China and the United States have expressed their concerns about the impact on their business in the discussions on the trade war. However, most of the interviewees interviewed at the Shanghai exhibition from April 24 to 27 are still hopeful of good results.
Keith Boss (Keith Boss), president of the Americas region of China Guangzhou Dailong Packaging Machinery Co., Ltd., said that his company has made a huge investment in the US market since 2012 and will not give up.
He said: "If this happens, we will survive the crisis. I believe this is a negotiation. Eventually the problem will be solved and it won't be as bad as it is now being proposed."
Trump said on April 24 that he would send four officials to China in early May to negotiate with China.
But on the other hand, the tariffs and counter-tariffs proposed so far by Washington and Beijing may reshape the market to a large extent.
Tariff threat up to 25%
In early April, the U.S. government threatened to impose a 25% tariff on goods listed on the 58-page list, which includes a variety of Chinese-made plastic machinery-injection molding machines, blow molding machines, extruders and hot-press molding machines, as well as molds.
In 2016, China's trade surplus with the United States in plastic machinery, molds and plastic products was $0.212 billion, $0.375 billion, and $12.3 billion, respectively.
In response, China has threatened to impose tariffs on a variety of American-made plastic materials. In 2016, American companies had a trade surplus of $2.7 billion million with China.
According to data from the American Chemistry Council (ACC), about 40% of the goods in retaliatory tariffs against China are chemicals or plastic materials.
In general, the top executives of participating companies are opposed to tariffs, as you would expect at a major global trade show.
Zhu Kangjian, chairman of Guangzhou-based Bochuang Intelligent Equipment Co., Ltd. and leader of China Plastics Machinery Industry Association, said: "If the war of trade war starts, the entire plastics machinery industry will be affected."
He said: "This has a negative impact on all parties. If there are many plastic machinery manufacturers in the United States, then I can understand the logic from a protectionist standpoint. However, many U.S. molders use imported machinery, and costly tariffs will be borne by U.S. consumers."
Opportunities in other regions
But some people see an opportunity. The Italian plastic and rubber processing machinery and mold industry association Amaplast issued a statement on April 26, saying that the association saw an opportunity from the possibility of a 25% tariff on Chinese machinery.
"U.S. production is not sufficient to meet domestic demand," Amaplast said. The vacancy created by the reduction of Chinese imports can be exploited by Italian companies to increase their sales."
At the International Rubber and Plastics Fair, most senior executives, including Zhu Kangjian, expressed hope that Beijing and Washington would eventually give in.
Deng Yu, chief executive of Datong Machinery Co., a Hong Kong-based machinery manufacturer, said the company's direct exports to the United States are not large, but it is worried that its Chinese customers will be affected.
He said: "We can see from the list that the goods subject to tariffs are mainly parts and components, so it will not have much impact on our customers. But I can already see that the confidence of our clients in various industries and their confidence in their investments has been affected."
He said: "Compared with the same period last year, I am less optimistic about the situation in the second half of this year."
Gu Peinan (Christian Kohlpaintner), a member of the executive committee of Swiss specialty chemicals manufacturer Claiant International Ltd., made a similar point.
The company, which operates in 52 countries, said it was still assessing the potential impact. But he argued that talk of tariffs and trade conflicts could shake business confidence.
"These discussions will have a greater impact on the overall business climate index," he said. People are even more uncertain about what will happen."
Some senior Chinese executives traveling to the 2018 U.S. NPE Plastics Industry Show privately said the potential tariffs prompted them to dig deeper into business plans.
However, another group of executives reiterated their commitment to the U.S. market.
"We are an honest company operating according to global standards," said Bos of D'Ailong Packaging Machinery. Our backup plan is to stand firm and price competitively. If that means adjusting our pricing, hopefully that's not a long-term situation."
"Most of the machinery in the beverage or liquid packaging sector at D'Ailon is not produced locally in the United States," he said. Our competitors are mainly from Europe."
Stephen Chung, executive director and executive director of group strategy, sales and marketing at Hong Kong-based machinery manufacturer Zhenxiong Group Co., Ltd., shared the same sentiment with many at the show, expressing his hope to avoid this trade war.
"Trump talks a lot," Chung said. But it remains to be seen whether the conversation will evolve into real action with consequences and costs.