Recently the Office of the United States Trade Representative (USTR) held the first hearing on increasing the tariffs of Chinese products. In this hearing, opinions about imposing 25% additional tariffs on the second consignment of Chinese goods which are worth $16 billion have been gathered. ZTT was the only Chinese enterprise attending the hearing.
In the hearing, Quan Shichao, the North America-based Sales Manager, on behalf of ZTT, raised objections to American decision of slapping tariffs with three reasons. Firstly, the customers and American consumers would be those who really suffer from the higher tariffs, because the majority of the customers of the Chinese enterprises, such as ZTT, are those large electricity companies. If the cost increased, they would have face job cut, which ultimately would affect the American people. If the cost of electricity companies increased, the electric charge would rise, too. Secondly, the products of ZTT wouldn’t cause threats to the national security of America, as ZTT only provides products. The installment and maintenance are undertaken by America’s local companies. ZTT only provides the consumers with different solutions and choices. Thirdly, compared with the American competitors, ZTT doesn’t take the biggest market share. The business community of China and the American manufacturing industry also favored Quan Shichao’s speech. Most American companies thought that imposing additional tariffs would continuously do harm to America’s economy, employment and the interests of consumers.
But on August 7th EST, the USTR released the final list of additional tariffs on the second consignment of Chinese goods. The conductor and power cable produced by the Chinese companies such as ZTT are on this list. After reading this list, Quan Shichao said that even though attending the hearing would not change the America’s decision of imposing 25% additional tariffs on Chinese products, Chinese should strive to speak loud to make their opinions taken seriously in US.
The urgent issue confronting the Chinese enterprises would be the 25% higher product price resulted from the additional tariffs. The products like conductor and power cable of ZTT would struggle in the American market. In addition, the submarine cable is technical product with high profit and without local competitors, it may have chance to survive in such difficult situation. However, those big projects decided before the next half year would have problems in signing contracts, as the project period of those products such as submarine cables often lasts 1 to 2 years.
Since 2011, ZTT has invested heavily and sent salesmen to conduct its market arrangement in US. In 2017, although the annual turnover of American market only accounted for a small share of ZTT’s total annual turnover of 40 billion CNY, the American market and the European market were important to the company’s overall strategic market arrangement. Even though the current situation is difficult to the company, ZTT would never give up and would endeavour to figure out the future exemption and solution of loss limit.
