US President Donald Trump’s renewed threat to impose tariffs on imported furniture could erode some of China’s exports while doing little to bring manufacturing back to America as he promised, according to analysts.
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And they added that such a move risks escalating tensions between the world’s two largest economies, whose earlier extension of a trade truce, coupled with conciliatory statements, had suggested a more amenable posture in trade negotiations.
Trump announced plans to impose steep tariffs on furniture imports in a bid to revive the domestic industry in the US states of North Carolina and South Carolina. Speaking at a cabinet meeting on Tuesday, he suggested duties could reach 100 or even 200 per cent, while signalling that the measures would be implemented “pretty quickly”.
“That [furniture] business was stolen from us by others, not only China,” he said. “All of a sudden, you’re ordering furniture from China.”
Trump’s latest pledge followed his announcement on social media last week that his administration had launched a tariff investigation into furniture imports, with findings expected within 50 days.
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“The measures are likely broad-based with the intention to reshore furniture manufacturing rather than directly target China,” said Lynn Song, chief economist for Greater China at ING.