No one wins from a trade war,” is a standard refrain among economists. Southeast Asian businesses are trying to prove that maxim wrong.
The region is capitalizing on a rush of new orders and production moves as firms reconsider their business in the U.S. and China amid a deepening trade war. About one-third of more than 430 American companies in China have or are considering moving production sites abroad amid the tensions, according to survey results released Sept. 13 by AmCham China and AmCham Shanghai. Southeast Asia was their top destination.
Vietnamese furniture producer Phu Tai Corp. is among those looking to cash in. The maker of home furnishings for Wal-Mart Stores Inc. outlets in the U.S. is planning for a 30 percent increase in its exports this year and in 2019, according to Deputy General Director Nguyen Sy Hoe. It’ll invest about $10 million to expand two factories at its base in Binh Dinh province and to upgrade production lines in two other factories in Dong Nai further south.
“We see this as a great chance to boost our exports to the U.S. as we’re getting more orders from that market,” Hoe said by phone Sept. 4. “Given the escalating trade war between China and the U.S., many American importers are switching to buy from Vietnam.”
Nguyen Thanh Phuong, chief executive officer of Kangaroo Group, a Vietnamese producer of home appliances, forecast a 10 percent increase in sales to the U.S. in the second half of 2018. His company has received orders from American clients who used to buy from Chinese makers, Phuong said in a Tuesday interview in Hanoi.
“The new U.S tariff is helping our products become more competitive against Chinese ones,” he said.
Malaysia furniture that might benefit in Vietnam Operation include Poh Huat Resources Holding Berhad and Latitude Tree Holdings Berhad.