Chinese suppliers have warned that they will hike up prices for Americans due to the closure of the Strait of Hormuz.
The war in the Middle East has stalled all shipments of oil and other products shipped through the Strait of Hormuz, raising concerns among Chinese manufacturers about further disruption across the global supply chain.
Pickleball paddle producer Devi Wei told CNBC, “Americans will need to pay more,” at a Beijing trade show last week at the China International Exhibition Center.
Wei, who founded his own exporting business, Huijin Trade, said he would need to hike the prices on his paddles and pickleballs by as much as 20% because of the recent swings in oil prices created by the closure of the Strait of Hormuz.
“I might have to go even higher,” Wei said.
“Maybe double if the Iran war doesn’t stop soon.”
Wei’s products are made with polypropylene, a plastic material derived from oil and made in the Middle East.
Surging oil prices are filtering into the prices of all kinds of products that rely on the commodity for manufacturing.
In the medical industry, Pang Li, sales manager at a Shanghai-based medical catheter maker, spent days urging United States buyers to lock in orders before her company raises prices by 6%.
“Rising costs have left us with no choice but to increase our prices, a first in my career,” she said.
“It’s a move of last resort, and we’re constantly mindful of the risk that clients might turn to our peers.”
This comes after her company reduced prices by more than 5% for U.S. buyers last year following President Donald Trump’s tariffs.
James Li, who makes scaved and sells a third of his inventory to the U.S., said he has marked up his polyester products by 5%.
“This scarf is 30% polyester,” Li told CNBC.
“We will definitely pass on the extra cost to our customers.”
Jinming Gifts' general manager, Wang Mingming, said the toy manufacturer is hoarding two months’ worth of the plastic polymer PVC, but isn’t sure if he can hold off charging more for his figurines.
“In our industry, these materials are almost irreplaceable,” Wang said.
“If oil prices rise any further, we really won’t be able to manage.”
Senior partner at Shanghai-based supply chain consultancy Tidalwave Solutions, Cameron Johnson, said he expects competition for oil-related products among entire sectors if the crisis at the Strait of Hormuz isn’t resolved.
He said the crisis stretching into May could raise the possibility of product shortages.
“If this goes on into May, everyone will be in big trouble and there will be triage between industries,” Johnson said, predicting autos and the medical field would be granted higher priority.
“There is no visibility when new supply will come.”
The manufacturers also worry that costlier oil will mean less discretionary spending for consumers worldwide.
“Ordinary people are getting squeezed the most from the high oil price,” he said.
“Their spending power just isn’t what it used to be.”
This comes as global oil prices jumped and Asian stocks fell sharply as the U.S.-Israel war with Iran enters its fifth week.
