Trade War Impact : Chinese Exporter Case Study

​The US-China trade war has intensified while the US announced to raise tariffs from 10% to 25% on US$200 billion of Chinese goods. The ripple effects severely hit on exporters, industrial supply chain, and also logistics companies. iQor RMS has dealt with a case involving a Chinese apparel manufacturer affected by the trade conflict recently. 

Due to unavoidable shipment delay, the cargo has arrived the US port later than expected. This resulted in additional tariff costs that the US customer refused to pick up and pay. As storage fees accrued day by day, along with the customs charges and freight costs, the outstanding amount became too much for the manufacturer to handle. Thus, they decided to seek assistance from iQor RMS.

Our professional collection team has learned from the past experience that similar cases could drag on for more than half year. Therefore, a solution has to be implemented as soon as possible. iQor RMS stepped in to resolve the dispute by explaining the pros and cons of current situation, including the piling storage fees and taxes, the product loss over time and the extra costs of returning cargo. In order to keep the good business partnership, legal actions would not be the best option. iQor RMS worked actively to create a positive negotiating atmosphere that both parties agreed to be responsible on half of the storage fees and duties. Besides, the US customer picked up and paid for the goods. Although both our client and the US customer had some loss in doing this business, they are satisfied with the result because this may lead to further delay and more charges.

The uncertainties of the US-China trade dispute would continue to crash China’s export and the ongoing tariff has put tremendous pressure on firms doing business in China. To support local enterprises and subsidize their operating costs, China has improved export tax rebate policy. Exporters, companies of the upstream and downstream supply chain, and logistics companies need to keep an eye on managing accounts receivable closely and ensuring a stable cash flow to avoid any financial risks.
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