Australian distributors, and buyers from retail groups are this week in Hong Kong for the annual Hong Kong Fair and as Chinese’s manufacturers spruik their wares Australian buyers are seen as being more import than buyers from the USA.

According to several Australian distributors at the show which normally attracts tens of thousands of buyers one is message is clear, Chinese manufacturers are reeling with “just about everyone claiming that all their US orders have been cancelled”.

As a result Australian buyers are being offered stock that was destine for the US.

Several have admitted that they are trying to get around the problem by shipping stock to Vietnam and Cambodia, both Communist Countries where the packaging is being reprinted to reflect Country of origin as being either Vietnam or Cambodia where tariff entry into the USA is lower.

Due to the escalating trade dispute, US President Donald Trump has hiked tariffs on Chinese imports to a staggering 145% with Australia, Europe and the UK seen as Countries where Chinese manufacturers are looking to shift stock.

For its part, China has retaliated by imposing a broad-based 125% levy on US goods.

Earlier today the Hong Kong Post said it had suspended goods mail services by sea to the USA and will suspend its air mail postal service for items containing goods from April 27 due to “bullying” U.S. tariffs.

When sending items to the United States, Hong Kong people “should be prepared to pay exorbitant and unreasonable fees due to the U.S.’s unreasonable and bullying acts,” Hong Kong Post said in a statement.

The brinkmanship between the world’s largest two economies is starting to jeopardize the global economies with questions now being raised as to what will happen to the manufacturers who claim that they will not survive without US orders.

Liu Tongyong is a sales manager for a company based in south China’s industrial heartland that makes mechanical keyboards and computer mice.

His firm, Gaoxd Precision Industry, is based in the manufacturing hub of Dongguan where several Australian distributors and CE retailers as well as several leading accessory brands source their products.

He claims that several Chinese manufacturers are now dependent on markets such as Europe, the UK and Australia.

One Australian distributor said “Dumping is inevitable and this could affect both major brands and house brand suppliers as some retailers are looking to deal direct with manufascturers”.

One retailer singled out to ChannelNews was Bunnings, also mentioned was Big W and Kmart.

Another issue for Goaxd Precision  is that it appears that keyboards and mice Gaoxd makes do not appear to be covered by the exemptions.

At Gaoxd, sales have plunged around 20% since the beginning of this year owing to the uncertain economic outlook caused by the tariff war, Liu told CNN.

“Everyone’s in wait-and-see mode. If you’re sitting on inventory, it is unlikely you will be placing new orders anytime soon,” he said.

With the US market accounting for 30% of the company’s sales, Liu said the tariffs have increased pressure on them to cut costs further a move that could benefit Australian trade buyers.

Several CE manufacturers are now sitting on boxes of stock in warehouses in China where they will remain there unless President Donald Trump lifts his 145% tariffs on all Chinese goods bound for the US.

Or they are able to move them to another Country where the Country of Origin will be changed.

One Chinese manufacturer said, “We have stopped production already,”.

“All the products are in the warehouse.”

It was the same story at nearly every booth in the sprawling Canton Fair in the trading hub of Guangzhou.

When the BBC speaks to Mr Xu, who was getting ready to take some Australian buyers to lunch who he claimed had come looking for a bargain and hoped to drive down the price.

“We will see,” he says about the tariffs. He believes Trump will back down.

“Maybe it will get better in one or two months,” Mr Xu adds with his fingers crossed. Maybe, maybe…”

In the small appliance arena, firms displayed everything from washing machines to tumble dryers, electric toothbrushes to juicers and waffle makers. Buyers come from all over the world to see the products for themselves and make a deal.

But the cost of a food mixer or a vacuum cleaner from China with the added tariffs are now too high for US consumers with manufacturers admitting that hundreds of products could be dumped on the Australian market in coming weeks, a move that could affect several distributors.