Exclusive | Donald Trump's trade war tariffs on China driving firms to Vietnam, ASEAN
- Tariff dodging strategy benefits Vietnam and other Southeast Asian countries
- US consumers can expect to pay more, the only question is how much
This story is part of an ongoing series on US-China relations produced jointly by the South China Morning Post and POLITICO, with reporting from Asia and the United States
President Donald Trump’s tariffs on Chinese imports are having the desired effect of driving production out of China – but not to the United States.
Less than a month after the Trump administration hit US$200 billion worth of Chinese imports with a 10 per cent tariff, leading Hong Kong based furniture maker Man Wah Holdings – which has more than 18 million square feet of manufacturing space in China – broke ground on an expansion of its facility outside Ho Chi Minh City in Vietnam.
In June the company, which specialises in reclining chairs and sofas that have become a fixture in middle-class American living rooms, bought 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 deep water ports of China and Vietnam’s new factory towns, 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 estates he helps recruit for so far.