The Pricey Spirit of Christmas: Cost of decorations made in China could spike due to tariffs

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03:15

As the Christmas holiday season quickly approaches, Santa's helpers are feeling the impact of the trade war between China and the U.S. That's as Chinese manufacturers hustle to fill their American Christmas decoration orders before a proposed tariff increase takes effect. CGTN's Li Linxi went to a factory in Zhejiang Province to find out how it's coping with the situation.

Christmas is in the air, right here in Yiwu. The city in east China's Zhejiang Province accounts for two-thirds of Christmas decorations around the world.

YAKHYOK HONTILLABOEV BUYER "I'm from Uzbekistan. I've been in Yiwu for two years. Products in Yiwu are cheaper, are of good quality and can be delivered very fast."

Shen Mengxia is one of the wholesalers in Yiwu International Trade Center. Her family has been making Christmas decorations for two decades.

SHEN MENGXIA CHRISTMAS DECORATION WHOLESALER "China is irreplaceable in the market. All of these petals and patterns are hand painted. Comparing with competitors in other countries, manufacturers in China are faster in publishing new designs."

The business is attractive for many, including the US.

It buys 90 percent of its Christmas items from China. But things are changing. A study is showing how US tariffs on Chinese goods are driving up prices. And each American family will have to pay an extra 127 dollars a year.

And some Chinese companies are already feeling some pain. This is a factory some 20 minutes drive outside the market.

"How's the preparation? Make sure the delivery will be done on time."

Huang Huimin has been making Christmas trees for 15 years. Her wares are for exports only and have always been popular. But this year hasn't been easy for her. Her long-time American partner, the number-one seller on Amazon, didn't confirm their orders until June.

HUANG HUIMIN CHRISTMAS DECORATION MANUFACTURER "This morning, my customer suddenly said they wanted to change the destination port to Indiana. And the products must be delivered in three days. They say they want to get them ahead of another round of tariffs. For us, time is really tight."

HUANG HUIMIN CHRISTMAS DECORATION MANUFACTURER "The current tariff is 10 percent, we can reduce our profit or the cost of raw materials to offset it. If the tariff climbs to 15 percent, we can divide it with our customers. But if it rises to 25 percent, we might have to drop America and look to other markets."

Huang is not the only one who holds that view in Yiwu.

HUANG FANG CHRISTMAS DECORATION MANUFACTURER "It's true that the US is a big buyer. But we have other markets. It's impossible for us to stop our business just because of America policies. We will carry on no matter what happens."

Improving products, reducing profits and exploring more markets are some of the answers for manufacturers in Yiwu. LI LINXI, CGTN.