HANOI, Sept 30 (Reuters): Trayton Group signed a deal to relocate most of its furniture production to Vietnam from China the day after Donald Trump was re-elected as US President. New US tariffs would not change the strategy, its head told Reuters.
The mid-sized manufacturer, which declined to disclose its revenues, ships 70 per cent of its furniture to the US, where its sofas and armchairs are sold either under top retailers' names or with its own Simon Li brand in major chains, including Costco.
Trump signed on Monday, opens new tab a document imposing 25 per cent tariffs on wooden furniture from October 14, which could rise next year to 50 per cent for vanities and kitchen cabinets and to 30 per cent for upholstery. He had earlier said the new duties would take effect on October 1.
Trayton is exposed to the levy on upholstery, said the company's founder and CEO Simon Lichtenberg, noting that may narrow margins but was likely to be largely absorbed by US consumers who will pay more.
The relocation to Vietnam, from where Trayton currently sends to America 50 containers per week, "remains the right strategy," he told Reuters, noting US duties are higher for exports from China, where the company still has most of its international workforce of more than 1,000.
China remains the company's hub for research and development, and spare capacity there could allow it to resume production if Beijing managed to lower tariffs on its exports to the US, Lichtenberg said.
In a posting on Monday on Truth Social, Trump said: "I will be imposing substantial Tariffs on any Country that does not make its furniture in the United States."
"It would be next to impossible to produce in the United States" because costs are too high and skilled workers would be hard to find, Lichtenberg said, noting that was out of the question.
Jonathan Sowter, head of Jonathan Charles Fine Furniture, a maker of high-quality wood furniture, which employs 2,500 skilled staff in Vietnam and ships about 60 containers a month to the United States, said he would seek to export more to alternative markets. US tariffs would potentially narrow margins, and higher prices were inevitable, he said.
However, "we would have zero intention to manufacture in the United States," Sowter added, noting his company's workforce could not be replicated in America.
Trayton's relocation of a large share of its export-bound production to Vietnam followed similar moves by its main Chinese competitors, including Man Wah Furniture and KUKA Home, which have all transferred capacity from China to its southern neighbour in recent years to avoid US tariffs.
As a result, Vietnam may be on track this year to surpass China as the main supplier of furniture to the United States, US data show.
