The United States raised tariffs to 25%, with furniture and timber traders Be the first to bear the brunt.

The United States raised tariffs to 25%, with furniture and timber traders Be the first to bear the brunt.

On May 10, the United States raised tariffs on $200 billion of Chinese imports from 10% to 25%. On the evening of May 8, a spokesman for the Ministry of Commerce said: It is not in the interests of the peoples of the two countries and the world to upgrade trade frictions. China deeply regrets that if the US tariff measures are implemented, China will have to take necessary counter-measures.

On May 8, Geng Shuang, a spokesman for the Foreign Ministry, also said at a regular press conference that “it is not the first time that the United States has made such a threat. China has expressed its position and attitude many times before, and our position and attitude have not changed.” At the same time, he said that the negotiation itself is a process of discussion. It is normal for the two sides to have differences. China does not avoid contradictions. We are sincere in continuing our consultations.

The US $200 billion tariff list includes plastics, ceramics, glass products, leather products, wood products, wool and carpets related to the home industry. The tariff escalation will have a direct impact on American home manufacturers.

American enterprises have been very dependent on imported products from China. As early as last year, American household enterprises expressed concern about product supply chain, demand and even the survival of enterprises after the US proposed tariff increase.

Sam Zavary, chairman of Exclusive Furniture, once said, “My goal is to talk to Chinese suppliers about how they will respond if tariffs are raised to 25%. We have a lot of functional cushion furniture imported from China. Now 10% tariff is not the most worrying thing for me, because there are many manufacturers sharing tariffs, but this is something we have to consider for a long time.

The U.S. government’s decision to upgrade tariffs will even put some U.S. furniture manufacturers in bankruptcy.

At the end of 2018, Curt Christine, CEO of Home Resources Inc., said, “If tariffs are raised to 25% next year, it will completely destroy my business.” He admitted that in such a short period of time, it is impossible to rebuild production chains in other countries, nor to find alternative products as cheap as Chinese products. After the imposition of tariffs, he has no alternative to supply contracts that have been signed. He either supplies at the original price and buys and sells at a loss or raises the price in breach of contract. If the customer doesn’t accept it, the business will collapse.

The impact of tariffs imposed by the United States on American hardwood producers has also emerged.

TJ Rosengarth, president and CEO of Tacoma, Washington, North America’s largest hardwood producer, believes tariffs will only aggravate the slowdown in China’s demand and may intensify the slowdown when tariffs increase to 25%. At the end of 2018, he pointed out, “The threat of hesitation still exists. Sales in the first half of this year are quite different from those in the second half. Tariffs have caused Chinese customers to stop importing and start waiting for clarity. But shipments have not stopped entirely. As of last summer, China’s consumption of hardwood has decreased by 30%.

John Beard, CEO of Beard Hardwood, a wood company, said that its exports accounted for 80% of the total, of which 40% were exported to China. Last December, he predicted that overall sales would fall by 10% or more in 2018. He said, “The company’s main product is poplar, and we achieved good results in the first six months of 2018. But in the past six months, we have been very difficult, because the situation is uncertain and the situation has gone downhill. With tariffs rising to 25%, Beard said that customers may ask to share costs, but their profit margins are too low to work.

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