Haier Group, the world’s largest white goods company, has suspended plans to sell products made in the US by its GE Appliances brand in China, citing the deepening trade war between Washington and Beijing, its chief executive said. Haier, based in the eastern Chinese city of Qingdao, acquired General Electric’s home appliances business for USD 5.4 billion in 2016, in one of the highest-profile Chinese deals in the US. It planned to begin selling the brand’s kitchen products in November. “Originally there was no problem [importing from the US] but now there may be problems,” Zhang Ruimin, Haier’s chief executive, told the Financial Times. “I think Chinese consumers are most interested in [GE] kitchen products. But the US government thought differently.” China said on Tuesday it would impose tariffs on USD 60bn worth of US imports, including of a range of kitchen products such as microwaves, electric ovens and drip coffee makers, after the US imposed levies on USD 200 billion of Chinese goods. The problem faced by Haier underlines the trade links between China and the US, with many Chinese companies operating manufacturing plants in the US. Groups with foreign investors accounted for more than 40 per cent of all Chinese goods exports last year. A large share of those companies was joint ventures with Chinese partners.
The target audience for GE Appliances products in China would have been affluent consumers, such as former students in the US who had returned home, Mr Zhang said. Haier had already begun promoting products made by the Louisville-based company in China ahead of a planned launch at a trade expo in Shanghai. Mr Zhang said that because most of Haier’s US sales were generated by GE Appliances, which makes most of its products in the US, the company would not be heavily affected by Washington’s tariffs. He added that Chinese companies which manufacture under licence for US companies would face problems.
Referring to the prospect of lengthy trade tension between China and the US, Mr Zhang struck a fatalistic note. “When winter comes, you have to make preparations, we cannot change the weather,” he said. Li Pan, Haier’s overseas managing director, said last month that GE Appliances had raised its prices twice this year, partly due to higher steel prices after Washington imposed steel tariffs in June. The Chinese company, which also owns New Zealand fridge-maker Fisher & Paykel and the white goods business formerly owned by Japan’s Sanyo, has the largest share — 14 percent — of the global household electrical appliances market, according to consultancy Euromonitor.―FT