Made in China: Trump re-election flags may get burned by his tariffs

[July 25, 2018]  FUYANG, China (Reuters) - The red, white and blue banners for U.S. President Donald Trump's second-term campaign are ready to ship, emblazoned with the words "Keep America Great!"

But they are made in eastern China and soon could be hit by punitive tariffs of Trump's own making as he ratchets up a rancorous trade dispute with Beijing.

At the Jiahao Flag Co Ltd in Anhui province, women operate sewing machines to hem the edges of "Trump 2020" flags the size of beach towels, while others fold and bundle them for delivery.

The factory has turned out about 90,000 banners since March, said manager Yao Yuanyuan, an unusually large number for what is normally the low season, and Yao believed the China-U.S. trade war was the reason.

"It's closely related," she said. "They are preparing in advance, they are taking advantage of the fact that the tariffs haven't gone up yet, with lower prices now."

The Trump administration has imposed tariffs on $34 billion worth of goods from China. After Beijing retaliated in kind, Washington announced levies on an additional $200 billion worth of products and threatened more, targeting potentially all of China's exports to America - including flags.

The campaign banners highlight a paradox in China-U.S. relations under Trump.

At about $1 apiece, even suppliers to the Trump campaign, who, Yao says, are located both in China and abroad, can't resist the low price. Yao's factory has been making Trump banners since the time his tag line as a candidate was "Make America Great Again".

"Sales have been great ever since 2015," she said.

But Trump's effort to wrest better trading conditions from China threatens that price advantage, and his hardline stance could eventually repel suppliers like Yao.

Flags for U.S. President Donald Trump's "Keep America Great!" 2020 re-election campaign are seen at Jiahao flag factory in Fuyang, Anhui province, China July 24, 2018. REUTERS/Aly Song

"If he continues to demand tariff increases as he has been, or if he continues to agree with those who are against China, I definitely would not be able to accept (more orders)," she said.

"Everyone can have a patriotic heart, but this won't improve his economy, and instead it could make us Chinese just shoot ourselves in the foot."

The Jiahao Flag Factory doesn't only make Trump banners. It churns out American and other national flags and specialty banners, including rainbow gay pride flags.

Factory seamstress Sun Lijun is losing no sleep over the trade war, however.

"I know that Trump's tariffs targeting China will have some effect, but we're not worried at all, since we're producing foreign flags every single day," she said.

(Reporting by Jiang Xihao and John Ruwitch; Editing by Clarence Fernandez)

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