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How British furniture imports might be impacted by new U.S tariffs on Chinese furniture. Photograph: Maersk
Apprehension among furniture makers was well-founded after fresh tariff proposals dragged the furniture industry into the developing trade war between China and the U.S. This could yet impact the UK.

 

The Office of the U.S Trade Representative (USTR) last week issued proposed tariffs on Chinese imports, which — if they come into effect — will see $200 billion of goods subject to an additional 10 percent tariff.


Earlier announced tariffs in June had seen a 25 percent levy attached to certain goods, though these largely missed out furniture, save for things like the motors used in adjustable furniture. This will more likely impact domestic U.S. producers rather than Far East finished furniture makers.


The latest USTR list, however, contained the full gamut of furniture goods, spanning wooden furniture for bedrooms, living rooms and dining as well as upholstery and mattresses.


This will create additional cost for U.S importers of Chinese furniture, with President Trump hoping a boost for domestic production will be among the side effects of the decision.


The proposed imposition of tariffs on some raw materials — such as timber and sofa fabrics — could thwart that intention, as U.S furniture production costs will also likely rise. Furniture supply chains are complex and almost always international.


If the tariffs come into effect, it does however seem certain it will negatively impact trade between China and the U.S.


Furniture importers at the Manchester Furniture Show this week believe that could be to the benefit of the UK industry, as it may create a supply surplus, and lead to cost price pressures for goods made out of China easing.


That would be welcome, particularly for cabinet furniture, where China's intense eco-drive of the past year has seen a surfeit of previously buoyant factories shut down at short notice.


Manufacturers that have failed to adequately cut emissions have been closed at a moment's notice, meaning the best factories are busy and running at capacity, The Furnishing Report was told this week.


One obvious consequence of Chinese tariffs could be a shift in production to other Far East countries. Vietnamese cabinet imports into Britain were worth £66 million in 2011, snowballing to £140 million in 2016, before falling 4.1 percent last year.


Could Vietnam be a beneficiary of the tariffs imposed on China-made furniture? Perhaps, but the problem with this is that there is no guarantee that other countries — such as Vietnam, Indonesia or Malaysia — won't be subjected to new tariffs by a President whose actions are hard to predict.


Thus, why would any factory owner in China make a business-critical decision like moving production to another country when they know that decision could be rendered moot on the whim of U.S trade policy makers.


Perhaps the most likely short-term impact will a benefit for Far East makers which already have production in multiple territories, some of which may be subject to tariffs and others not. Operating multiple factories means some at least may have the flexibility to allocate production for each market more favourably.