Andy Wu, the chair of the Travel Industry Council of Macau, warns that the US tariffs on China could translate into lower spending by mainland tourists, even if the Macao’s overall arrival numbers remain largely unaffected.
In an interview with Macao Daily News, Wu said that mainland visitors – Macao’s bread and butter – will become prudent given the weakening of the yuan as a result of Washington’s hostile trade actions. According to Reuters, the Chinese currency plummeted to a 17-year low yesterday, hitting 7.3498 against the dollar.
At the same time, the falling yuan will increase the purchasing power of Macao residents in the mainland, further incentivising them to take their spending away from local shops and restaurants, whose sales have been struggling in recent years.
[See more: Trump pauses most tariffs but singles out China for a rate of 125 percent]
Macao’s high-end retailers are expected to be the ones most susceptible to the economic pressures arising from the uncertainty in the global economy.
Wu’s observations concur with those of other local experts, including Lao Chi Ngai, the head of the Macau Economic Association, who said that mainland tourist spending in Macao would be negatively affected by the falling yuan.
Announced last Wednesday, the US tariffs originally covered 185 countries and territories, although US President Donald Trump has since issued a 90-day pause for most nations and regions. China, however, has not received any reprieve, with Washington slapping additional tariffs on Chinese products, bringing the total levy to a staggering 125 percent.
