Welcome to the Year of the Snake. The traditional Chinese zodiac calendar would have it that we’re in for a time of transformation—which certainly seems right. But if you also associate snakes with lurking danger, you may not be too far off the mark.
The new year has been here for nearly a month in Western countries, but in China it began this week, with the Lunar New Year celebration that kicks off the massive annual migration of hundreds of millions of citizens returning to their hometowns to be with their families. If the 15-day ritual is the same as past years, it could mark a change in the way China does business with the United States, as each country engages in political gamesmanship to gain a competitive advantage.
For the American furniture and home furnishings sector, which still gets the overwhelming majority of its products from China despite some efforts to reduce those levels over the past few years, 2025 could be a game changer—though for companies in the industry, it’s no game. In less turbulent times, the biggest concerns for importers around the Lunar New Year are typically related to the production pause in China and the time lag in getting shipments resumed. More recently, slow business conditions and high inventory levels in the U.S. have reduced the impact of Chinese factory shutdowns, but this year the industry has different problems to deal with.
Much of this tension and uncertainty stems from the new Trump administration’s hardline stance on China, which at least initially seems to be much more aggressive than during his first administration. From tariff threats to possibly revoking China’s preferred-nation trade status, this new year could be radically different from 2024.
Here are some of the areas of contention:
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Tariffs
After an assortment of campaign statements threatening tariff hikes of as much as 100 percent, Trump took office 10 days ago and has said his administration will impose a 10 percent tax on everything from China (and stiff 25 percent tariffs on Canadian and Mexican goods), effective February 1. Ostensibly these new tariffs are in response to illegal immigration and imports of narcotics, but they are also political posturing as the new president moves to aggressively implement his campaign promises.
China, for its part, has promised to retaliate with its own tariffs on American goods brought into the country. And while very little in the way of home products are exported from America to China, manufacturers of automobiles, airplanes, consumer electronics and well-known brands like Marlboro and McDonald’s would be targeted in a tit-for-tat trade war, risking further escalation.
Trade Policy Review
Trump has ordered a full-scale review of all trade agreements and policies across federal agencies, with recommendations and analysis due on April 1. While this gives more than a 60-day grace period for negotiations to take place, the trade review also provides the new administration with an opportunity to base policy changes on an analysis rather than just on political rhetoric. One key element that is likely to be scrutinized is the de minimis policy that allows e-commerce sellers like Shein and Temu to operate in the U.S. with little or no import duties. (Shipments are not subject to taxes or duties when valued under $800 per customer per day.) The outgoing Biden administration made a last-ditch effort to address the issue but was never able to come up with a workable response.
Trade Status Revocation
Members of Congress from both parties introduced legislation last week that would effectively revoke China’s Permanent Normal Trade Relations status with the U.S. The designation, which was first granted by the U.S.–China Relations Act of 2000, was meant to reduce trade barriers between the two nations. However, the tariffs of the first Trump administration and their continuation under Biden effectively ended many of those measures, analysts have said. Should this new legislation be signed into law, it would address many of the elements that are under review in Trump’s April 1 deadline decree.
The Chinese New Year celebration ends on February 12, and it’s unlikely that any of these broader issues will be resolved when workers return to their jobs after the holiday. But for both importers and retailers doing business with China, the stakes are going to be very much raised through the balance of 2025—and into the rest of the Trump presidency.
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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.