China’s furniture makers hope for trade war’s end as US orders ‘disappear’ following the 25 per cent import tariff
- Chinese companies hurt by falling orders take a wait-and-see approach to apparent thawing between two largest economies over damaging levies
- Manufacturers say they have limited room to adjust prices without destroying profit
Chinese furniture makers, hard hit by a higher tariff on exports to the US last month, see a ray of hope from the apparent trade detente between the world’s two largest economies following the G20 summit in Japan last month.
The agreement between US and Chinese officials to resume economic and trade negotiations has been welcomed by furniture makers who say their US buyers have practically disappeared since their goods were subject to a 25 per cent levy on June 1. The tariff replaced a 10 per cent levy imposed by US President Donald Trump on furniture and other Chinese-made goods since September.
“The trade tensions appear to be so volatile that we have no clue on how to adapt to the fast-changing situation,” said Zhang Xiaojun, a senior sales manager with Haining Mengnu Group which exports about 2 billion yuan (US$291 million) of sofas and other home furnishings annually to the US.
“We are expecting the governments to reach a deal soon and scrap the tariffs imposed on our products. After all, it is a do-or-die game for Chinese furniture companies.”
Furniture makers rank as the industry most affected by the new US tariff regime on US$200 billion worth of Chinese goods, according to China International Capital Corp (CICC).