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When Trump was elected in 2016, almost 100% of M Group’s hotel furniture was made in China, but only half after four years.
After 4 years under the impact of anti-dumping duties, tariffs and political tensions between the United States and China under the administration of Donald Trump, around 50% of the production lines of the American corporation M Group are dispersed. in Southeast Asia and Eastern Europe, rather than concentrating exclusively on China.
“We finally came up with a solution, thanks to our tight flight schedules. My oldest son and I fly almost all over the world in search of resources,” said H. David Murray, president of the US conglomerate M Group, said.
First, President Trump imposed a 341% anti-dumping tax on Chinese-made marble countertops, followed by a series of taxes on wooden cabinets, bathroom shelves, kitchen cabinets, and nightstands.
“All of these products are affected by antidumping measures, because the current political environment in the United States is perfectly conducive to that,” Murray said.
The assembly plant of the American automaker General Motors and its Chinese counterpart is located in Liuzhou city, Guangxi province. Image: Reuters.
The businessman said he wants to keep production in China because there is nowhere else that can compete on cost, speed, scale and quality of production. But if the US-China trade war continues after the November US presidential election, it may have to leave the world factory, although it is unlikely to return production lines to the US.
“The state of North Carolina used to be a producer of a lot of hotel furniture, but that was 20 years ago. If now you were funding us $ 5 million to open factories, skilled workers. we want to find are between 68 and 70 years old, “Murray said.
“Then comes the supply chain problem. If I were the most competitive in this, it would take me 3 to 5 years to build the supply chain, but the cost could be double. Vietnamese or Chinese suppliers,” he added.
Murray’s company is just one of many that witnessed many ups and downs during Trump’s four years in office, when he made a tough commitment to China and brought American businesses home. When Democrat Joe Biden follows a similar policy with China, many companies think it will be chaos next time, regardless of who wins the election.
“If it weren’t for the tariffs, I’d be in China now,” said Larry Sloven, who spent many years planning to move LED light bulb maker Capstone International from China to Thailand.
The production line was relocated just before the outbreak of the Covid-19 pandemic. “It is not an easy road and the biggest challenge is the supply chain. All components, batteries, chips, resistors, cables are made in China. The prices are already higher than in Thailand and now.” We also have to send packages to the United States, “Sloven said.
The Slovenian added that companies that do not leave will be trapped in China, because whoever the next president of the United States is, tariffs will not be lifted. “Trump completely changed the lives of so many people. He changed the entire manufacturing industry,” he said.
For entrepreneurs, China is an attractive manufacturing location with good infrastructure, a stable supply chain, and a skilled workforce. A recent survey by the US Chamber of Commerce in Shanghai showed that despite pressure from Trump, 92.1% of its members have no plans to leave China.
“China is the easiest place in the world to do business, with its large retail market, you can have everything you need in your supply chain, from components to raw materials. Everything can be easy. It’s easy to find here,” he said. Murray.
President Donald Trump at an event in Manchester, New Hampshire, USA in August 2019. Image: AFP.
In addition to pressure from Trump, many American companies said that their decision to relocate production lines sometimes depends on the needs of American consumers. A survey by research firm Pew in September found that 78% of Americans now have no sympathy for China, the highest level in 15 years.
“In addition to electrical and electronic products, customers now tend to look for products made outside of China,” said Hiten Shah, president of sourcing company MES Inc.,. “Last year they were concerned about the tariffs, but now they are concerned about the possibility of a military conflict and a rapidly deteriorating relationship between the two countries.”
A year ago, Kent International was one of many companies considering leaving China. The bicycle maker, which mainly sells to US retailers like Walmart, has been hit hard by the tariffs due to trade tensions and its Chinese manufacturing partner has invested $ 10 million in a single location. Cambodia’s main production center.
The plan to move to Cambodia fell through, but the company was “launched” just before the pandemic, and many of its products were tax-free, according to CEO Arnold Kamler.
Kent International’s partner is Shanghai General Sports, a family business run by Ge Lei. Ge Lei said she abandoned her plan to build a factory in Cambodia to move to another factory in Malaysia. This factory has the capacity to produce 600,000 bicycles per year and has an insurance policy to avoid the effects of future rates.
“Overall, I don’t think Trump’s election four more years is good for his business because his policies are so erratic. For factories like ours, bad policies like tariffs are not.” “We can move production to another country. But Trump’s policy one after another could cause our investments to collapse,” Ge said.
Despite avoiding the worst impact of direct import tariffs and increased bicycle sales, Kamler still suffers from Trump’s unusual policies. He had planned to move most of the production line to South Carolina, but had trouble finding the cost and supply.
“If we can have enough capabilities, we can seriously consider starting the production line from scratch in the US,” said Kamler. “But I need certainty. I don’t care if the fee is zero or 50 percent. In order to build a business strategy, we need some certainty, but absolutely nothing uncertain over time.” Trump. “
Thanh tam (Follow SCMP)
