President Donald Trump’s tariffs on Chinese imports are having the
desired effect of driving production out of China — but not to America.
Less than a month after the Trump administration hit $200 billion worth of Chinese imports with a 10 percent tariff, Hong Kong-based furniture maker Manwah Holdings broke ground on an expansion of a facility outside Ho Chi Minh City.
The company, which specializes in reclining chairs and sofas that have become a fixture in middle-class American living rooms, purchased in June what was already one of Vietnam’s largest furniture factories. By next year, it will be the biggest.
Some 9,000 miles away from the deepwater ports of China and new factory towns in Vietnam, American retailers are grappling with how much of the tariffs they can absorb.
Gao Jian, of the Vnocean Business Consulting Service in Vietnam, said he has guided about 40 Chinese enterprises per month to the more than 50 industrial parks he helps recruit for so far.
“Some companies can absorb a 10 percent tariff, but a 25 percent
would eat up their entire profit,” Gao said. “They would have to relocate and shut down their factories in China.”