Where will Chinese wood products processing enterprises go after losing the European and American markets

Where will Chinese wood products processing enterprises go after losing the European and American markets?

Since the United States imposed tariffs in May last year, it has had an immeasurable impact on China’s small and medium-sized enterprises. The US $200 billion tariff list includes plastics, ceramics, glass products, leather products, wood products, wool, carpet and other textiles related to the home furnishing industry. The tariff upgrade will have a direct impact on Chinese home furnishing manufacturers.

China’s wood products industry is mainly made of raw materials such as logs, wood-based panels and sawn timber, which are processed into cabinets, furniture, toys and other products by mechanical or manual means, and then exported to Europe, America, Japan, South Korea and other places.

It is reported that in Fujian Province, some furniture export enterprises, especially those at the bottom of the industrial chain, which have been relying on price advantages for a long time, are particularly difficult to survive under the pressure of 10-25% tariff.

Under the trade war, the export of furniture to the United States has undoubtedly come to a fork in the life and death of enterprises. Will Chinese wood products processing enterprises choose to continue to expand the U.S. market or seek other ways?

Adhere to overseas distribution: open up new channels

Returning to the domestic market is an option, and continuing to compete with the U.S. market requires greater courage. Therefore, it is particularly important for Chinese wood products enterprises to explore new market channels.

One belt, one road, China’s white one belt, one road, has been developing steadily. Ross’s relationship with China has been relatively stable throughout the world. Especially in recent years, under the advocacy of “one belt and one road”, Bai Ross has been actively involved in the development of the “important area” along the “one belt and one road”.

Where will Chinese wood products processing enterprises go after losing the European and American markets?

Under this background, the white wood industrial park in China will become the only choice for Chinese wood products enterprises to enter the European and American markets. At the same time, China white wood industrial park also provides tax-free services for all Chinese enterprises for up to 10 years. Including the exemption of corporate profits tax, import and export duties and other taxes.

To build core competitiveness and enhance their bargaining power.

On the one hand, the trade war makes furniture import and export enterprises fall into great difficulties, but at the same time, it also exposes many problems that we have ignored or ignored for a long time.

In fact, in the export to the United States, furniture enterprises tend to pursue “small profits and high sales”, rather than actively improve their bargaining power. Enterprises lack of their own core competitiveness, in the competition can only reduce profits and low prices to obtain orders, so after the outbreak of the trade war, they soon fell into the plight of operation. Due to the long-term nature of the trade war, a number of enterprises are bound to withdraw from the market.

Summary:

The outbreak of trade war may make enterprises break away from the path dependence in the past and try different ways and solutions. So in our view, a trade war may not be a bad thing. The key is how we look and how we do it.

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