THE city of Yiwu in southern China’s Zhejiang Province doesn’t have elves or snow, but it’s as close to Santa’s workshop as you can get outside the North Pole.

The streets of its commercial district are crowded with shops peddling all things Christmas: minitrees, plastic reindeer, glittery wreaths, and flashing lights of every color — lots and lots of lights.

The stores are stuffed wall-to-wall with Yuletide swag, and goods routinely spill out onto the sidewalk — all the better to catch the attention of visiting buyers from the United States and other Western nations.

U.S. President Donald Trump’s trade war was supposed to be the Grinch to steal the Christmas cheer from this holiday-exporting hub southwest of Shanghai. But, so far at least, it looks as if the enduring power of globalization — and entrenched supply chains — is winning out.

“Orders from the United States for this year’s Christmas were pretty good. I don’t really care what Trump is doing. It doesn’t affect us,” said Hong Feihong, owner of Ziru Christmas Crafts.

Whether twinkling lights, life-sized sleighs, or aprons illustrated with Mrs. Claus’s silhouette, holly-jolly tchotchkes made for export are a US$5.6 billion industry in China.

No other nation has the supply chain and manufacturing infrastructure to create Christmas in such quantities. And no group in the country is as adept at churning out holiday goods as the warren of small manufacturers scattered around the Yiwu area, which accounts for 70 percent of those exports, according to Chen Jinlin, secretary-general of the Yiwu Christmas Products Industry Association.

That concentration of talent and resources is a big reason retailers around the world are sticking with suppliers in Yiwu, despite the 10-percent tariff the United States placed on China-made Christmas lights and wrapping paper this summer.

Even with a looming increase in those levies to 25 percent Jan. 1, retailers haven’t shifted their purchasing to other countries.

“No player in that ecosystem wants to be the first to move,” said Michael McCool, a Hong Kong-based managing director at consulting firm AlixPartners LLP. “Since nobody wants to be the first to move, nobody moves.”

Because the United States buys about 90 percent of its Christmas lights from China, they’re one of the most-affected items on the Trump administration’s 5,745-product tariff list. Last year the U.S. imported US$419 million of lights and US$2.3 billion of other “Christmas festivity articles” from the country, according to the United Nations Comtrade Database.

Wang Chaoyi, owner of Taizhou Huanyu Lighting, said he isn’t overly worried about the tariffs. That’s because, rather than selling them as strands, he increasingly incorporates the lights into larger Christmas products.

Those higher-priced holiday items, often destined for big-box stores in the United States, are better able to absorb the tariff on lights.

Wang predicts that Americans will simply pay more for their lights, because retailers don’t have any cheaper options. “They can’t get this stuff anywhere else,” he said, referring not only to his multicolored strands of lights but also to his supply chain. “The advantage is that we can sell our goods together, which helps maintain the price, since buyers can’t pick and choose.”

When Wang develops a new color combination or design, each supplier adjusts and sends new material, making their locations — within an hour of his factory — crucial.

“This can be a very ad hoc process, which is why it needs to be done face-to-face and relies on everyone being close together,” McCool said. “It’s difficult to achieve the same outcome if you’re doing that out of Vietnam.”(SD-Agencies)