Chinese manufacturer Soton Daily Necessities, a leading straw producer which has found itself at the center of a trade war between China and the United States triggered by the U.S. abuse of tariffs, said that the U.S. tariff policy is a typical example of trade bullying that disrupts global industrial chains.
Drinking straws are among the hundreds of billions of dollars' worth of goods shipped from China each year to stock American supermarkets, and the U.S. tariff policy has put the straw supply chain at risk.
The company, based in Yiwu, China's small commodities hub, has seen American clients abruptly cancel and then revive orders after new U.S. tariffs exceeding 100 percent took effect last month.
As one of China's largest straw exporters with a factory where machines spit out 400 plastic tubes per second, Soton's production capacity is hard to find elsewhere, a reality confronting American clients who face tariffs when importing goods from China.
"This order was actually canceled last month. Our American clients had called off the production. But now they are telling us to resume production, to proceed with orders they already placed," said Li Erqiao, general manager of Soton Daily Necessities.
While buyers might temporarily absorb costs by raising a one dollar fifty pack to one sixty, Li warned sustained tariffs would inevitably push production elsewhere.
"We cannot rule out the possibility that other countries will develop industrial chains that enable them to make these straws. It's not impossible. In fact, if the United States persists in imposing such heavy tariffs specifically on China, then the relocation of these supply chains is inevitable," Li said.
For the company's founder Lou Zhongping, domestically dubbed China's "king of straws," losing American clients who made up about 10 percent of sales last year will be painful, but there are plans for this case. He has been supplying some of the world's biggest brands over the years.
"Our company has been decoupling from the U.S. for over a decade. We didn't use this term 'decouple', because we found it's just that the U.S. market is not worth us lingering too much. Secondly, since former U.S. President Barack Obama talked of bringing back manufacturing, the United States has become increasingly closed off," Lou said.
Straws are exactly the kind of low-value product the United States has long outsourced, a result of comparative advantage that, Lou says, has largely benefited both countries.
"China trades one billion shirts for a U.S. Boeing airplane, but now it makes no sense that the United States says it wants to make both Boeing airplanes and those cheap T-shirts. That's what U.S. President Donald Trump doesn't get," he said.
Lou said that now China takes a bigger share of the cake, and the United States is manifestly undermining its development.
As businesses on both sides of the Pacific anxiously await the prospect of trade talks, Lou, along with many others in China, see the issue not just as an economic dispute, but a moral one.
His critique turns philosophical -- Western values speak of the rich helping the poor, but today's tariffs sound unethical in this regard.
"If this is how it works, then what about the equality between people, between nations, between developed and developing countries? The principle of the rich helping the poor is at the core of Western universal values. Have you forgotten that? So today, what the United States is doing is, to some extent, unethical, both from a personal and national perspective," he said.
China's top straw maker terms US tariff policy as "unethical"
