Trade tensions with U.S. testing Chinese consumers

Trade tensions with U.S. testing Chinese consumers


Guo Qingshan delights in riding his 400,000 yuan ($63,839) Harley-Davidson motorbike around Beijing's suburbs.

"I love the sound of the engine and the muscle of the motor. When I ride it, I feel free and proud," the 32-year-old said.

However, Guo has his limits.

. Beijing, China. Reuters
A detail of the Harley-Davidson.

Deteriorating trade ties between the United States and China could mean American imports, including Harley-Davidson motorcycles, could be much more expensive in the future as the two countries trade tit-for-tat tax hikes on each other's goods.

If prices rise, Guo said he wouldn't contemplate buying another Harley.

. Beijing, China. Reuters/Thomas Peter
A Chinese woman tastes wine during a wine seminar.

Since entering office, U.S. President Donald Trump has taken a hard line on trade. Last month, the world's biggest economy said it would impose tariffs on steel and aluminium imports from most trading partners, including China.

In response, China slapped additional import taxes on 128 U.S. products, including frozen pork and wine. Soon after, it said it was considering additional duties on 106 U.S. imports, though it has not said when the new tariffs could kick in.

. Beijing, China. Reuters/Damir Sagolj
Xie Guoqiang, who runs Vin Place, a wine and liquors store, said that the tariffs would have little impact on his business, as the shop mostly imports wine and liquors from France, Chile, Austria and Argentina.

U.S. goods in the crossfire range from soybeans, cotton, autos and auto parts, to whiskey and particular varieties of wheat, with their value totalling $50 billion.

The tensions are already affecting consumers in China.

. Beijing, China. Reuters/Thomas Peter
Zang charges her Tesla car.

Zang Yi, owner of a Tesla car, said if the trade tensions resulted in pricier U.S. imports, she wouldn't consider American brands when the time comes to buy a new car.

"With the tariff, I would have to pay tax of 100,000 yuan to 200,000 yuan if I were to buy a new Tesla," she said.

. Beijing, China. Reuters/Thomas Peter
Liu rolls dough.

Liu Anqi, 25, has just opened a bakery in Beijing with her friend. She also teaches customers how to make cakes with a brand of flour that uses only wheat from the United States and Canada.

"Flour is one of the most important ingredients in baking and its quality varies with different brands," Liu said, adding that finding a new brand would be time-consuming and higher taxes on this wheat would force her to raise cake prices and tuition fees, which could turn customers away.

Not all business owners are concerned.

. Beijing, China. Reuters/Thomas Peter
Liang poses with a piece of beef imported from the U.S.

At Wolfgang's, a high-end steak house in East Beijing's Sanlitun district, head chef Liang Xin said U.S. beef has always been limited in China, so he doesn't know how customers would react if the restaurant has to raise prices.

A 15-kg whole cut of beef from the United States is around 20 percent more expensive than its Australian counterpart, said Daniel Sui, deputy general manager at Wolfgang's.

. Beijing, China. Reuters/Thomas Peter
Beef imported from the U.S. at Wolfgang's.

"Customers like U.S. beef because it tastes juicy and tender, but Wolfgang's only sells around seven to eight pieces of U.S. imported beef steak each day," Sui said.

"The limited supply is because the Chinese government bans feed additives and only 5 percent of U.S. beef is qualified for export."

. Beijing, China. Reuters/Thomas Peter
Liu at the back door of the kitchen where he works as a chef.

Liu Ming, a chef at a Sichuan restaurant in Beijing, said the oil that his restaurant uses is produced with soybeans imported from the United States, and the business won't change the brand even if prices rise.

"We use this oil because it gives the food a bright colour and does not leave a strange smell or taste," he said.

"We don't know what will happen to our dishes if we change the oil."

. Beijing, China. Reuters/Thomas Peter
Fried vegetables in the kitchen of the restaurant which uses oil produced with soybeans imported from the United States.