China made LED light bulbs are displayed at a booth during a lighting fair in Hong Kong, China April 9, 2018. REUTERS/Bobby Yip
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Allan Chau, the general manager of a Chinese factory making precision metal parts for U.S. customers, is still calling it a "proposed" trade war, but that hasn't stopped him from planning for the worst. Unlike last year, when U.S. President Donald Trump sounded protectionist warnings that were largely dismissed as bluster, Chau and other factory bosses across China say the risks from this trade spat are now far more tangible.Of the 1,500 or so metal parts made in Chau's plant, including needles for espresso machines to puncture coffee capsules, he says around 200 could be hit by the proposed U.S. tariffs that stand to affect $50 billion worth of Chinese goods.In interviews with six other Chinese manufacturers of LED lighting products, another affected sector, four expect some closures of Chinese factories, particularly those making more generic products like bulbs and LED panels.Jacky Patel, the president of OM Lighting, an exporter of Chinese lighting products to several U.S. states including Florida, said the tariffs would be passed onto U.S. consumers.Under a so-called harmonized system of tariffs, Chinese products are now coded specifically so that the same product would face higher U.S. tariffs if used in a higher-tech sector like nuclear energy, rather than a more generic category like household electronics.
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