China exporters feel Iran-war shock

Chinese exporters are getting hit from both ends: overseas orders are softening as the Iran war pushes up freight, fuel and raw-material costs. (money.usnews.com) At the Canton Fair in Guangzhou, Xiatao Plastic Industry said raw-material costs had jumped 20% since the war began, and its profit margin had been cut in half to 5% to 6%. Weking, a maker of rice cookers and kettles, said output had fallen by half as orders slowed and plastic, copper and aluminium got more expensive. (money.usnews.com) The Canton Fair, China’s biggest trade show, opened with about 32,000 exhibitors spread across a site Reuters said was larger than 200 football fields. Sellers there said they were re-quoting prices to foreign buyers as the war changed shipping and input costs week by week. (money.usnews.com) The timing is awkward for Beijing because exports have been carrying more of China’s growth than household spending. China’s National Bureau of Statistics said the economy “got off to a good start” in the first quarter on April 16, even as officials acknowledged uneven domestic demand. (stats.gov.cn) Outside China, the Asian Development Bank said on April 10 that developing Asia and the Pacific would slow to 5.1% growth in 2026 and 2027, down from 5.4% in 2025, with the Middle East conflict raising energy costs and inflation. The bank put regional inflation at 3.6% in 2026, up from 3.0% last year. (adb.org) Some Chinese firms are also watching Washington as closely as they watch shipping lanes. Reuters reported on April 6 that President Donald Trump is due to visit China in mid-May for talks with Xi Jinping after an earlier plan slipped because of the Iran war. (usnews.com) That trip matters to exporters because the White House and Beijing have spent the past year moving from tariff escalation to temporary truces, court fights and sector-by-sector bargaining. Reuters reported that the two sides cut a 90-day deal in Geneva in 2025, extended it, and kept talking through Paris this year even after the U.S. Supreme Court rejected Trump’s global tariff regime in February 2026. (usnews.com) The war has also sharpened the politics around shipping itself. On April 22, China’s foreign ministry rejected Trump’s claim that a vessel seized by U.S. forces in the Gulf of Oman carried “a gift from China” to Iran. (thestar.com.my) Foreign ministry spokesperson Guo Jiakun said the ship was “a foreign container ship” and said China opposed “any malicious association and speculation.” Trump had said he was “a little surprised” because he believed he had an “understanding” with Xi on no Chinese weapons deliveries to Iran. (thestar.com.my) The result is a trade picture shaped less by one tariff line than by war risk, rerouted cargo and political discretion in Washington and Beijing. For factories in southern China, the next test is whether fighting eases before higher costs turn today’s thinner margins into layoffs. (money.usnews.com)