Chinese manufacturers of plastic Christmas trees and holiday decorations are facing order declines from the US due to increased import duties. The tariffs, a result of the escalating trade war initiated by US President Donald Trump, threaten significant consequences for China, the world’s largest exporter of industrial products. American retailers rely heavily on China for Christmas decorations, purchasing 87 percent of these products, worth $4 billion, from Chinese factories.

The increased tariffs have led to a significant drop in orders from American clients, impacting Chinese factories that depend on the US market for half of their production. This situation could lead to higher prices for American consumers and potential shortages of Christmas decorations.

Some factory owners are exploring alternative markets like Russia, Europe, and Southeast Asia to offset potential losses from the US market. However, economists predict the trade war will negatively impact China’s economic growth, exacerbate industrial overcapacity, threaten jobs, and intensify deflationary pressures. Reduced exports to the US will force Chinese exporters to compete more aggressively on prices in other markets, affecting profit margins and potentially leading to cost-cutting measures at home.

Alternative sourcing is limited, as Cambodia, the second-largest exporter of Christmas decorations to the US, also faces increased tariffs. Relocating production to the US is not considered feasible due to a lack of existing infrastructure, technology, and a prepared labor market. The American Christmas Tree Association anticipates significant price increases and views the industry as an unintended victim of a geopolitical conflict.