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Impact of the US-China Tariff War on the Household Vacuum Cleaner Industry

Key Points

Production Shift: Research shows that the US-China tariff war may lead to the shift of household vacuum cleaner production to Southeast Asian countries such as Vietnam and Malaysia to circumvent high tariffs.

US market pressure: Chinese brands face price pressure in the US market, but demand for smart vacuum cleaners continues to grow.

Intensified domestic competition: Competition in China's domestic market is fierce, prices are falling, profit margins are compressed, and technological innovation is driven.

Dyson Adjustment: There is limited information on Dyson's layoffs in Malaysia, but its global strategy may involve automation and production optimization.

Non-US market expansion: Chinese brands are increasing their investment in European and Asian markets to reduce their dependence on the US market.

Impact of production shift

The US-China tariff war has prompted many Chinese vacuum cleaner manufacturers to shift their production lines to Southeast Asian countries with lower costs and more favorable trade policies. For example, Vietnam surpassed China in 2023 to become the largest source of household vacuum cleaner imports to the United States, reflecting a significant shift in production bases.

Supply chain and market changes

The tariff war has complicated the supply chain, and Chinese brands have reduced their dependence on the US market and turned to the European and Asian markets. Data from 2024 shows that Chinese brands account for more than 60% of the global smart vacuum cleaner market, indicating that their competitiveness in non-US markets has increased.

Challenges and opportunities in the US market

As Chinese-made vacuum cleaners are more expensive due to tariff increases, some consumers have turned to other brands, but the demand for smart vacuum cleaners continues to grow. Chinese brands such as Xiaomi and Ecovacs have maintained a certain share in the US smart home market with their intelligent technology and lower prices.

Take the leading manufacturer Dyson as an example. Dyson is weak in the face of competition from Chinese manufacturers. It once laid off employees in Singapore. Dyson has an important production base in Malaysia and built a factory in the face of the aggressive local attack, mmmm, Chinese manufacturers. Its global strategic adjustment may involve automation and high-tech manufacturing, but the specific impact in Malaysia needs further evaluation and observation.

Production transfer: Southeast Asia becomes a new focus

Since the intensification of the Sino-US tariff war in 2018, the United States has imposed high tariffs on Chinese goods, which has directly promoted the production transfer of the household vacuum cleaner industry. According to a report in May 2023, Vietnam has surpassed China to become the largest source of household vacuum cleaner imports to the United States. In February 2023, the United States imported 1.4 million household vacuum cleaners from Vietnam, a year-on-year increase of 54%, while the number imported from China in the same period was 1.3 million (Vietnam Tops China).
For example, Chinese manufacturers such as Kingclean Electric and Ningbo Fujia Industrial have established factories in Vietnam since 2018, with Kingclean's investment increasing from US$7 million to US$40 million, and Fujia's annual production capacity is expected to reach 1.2 million to 1.5 million units in 2023. These transfers not only reduce costs but also take advantage of Southeast Asia's trade preferential policies to help companies bypass US tariff barriers.

Supply Chain Adjustment and Market Changes

The tariff war has made the supply chain in the vacuum cleaner industry more complicated. Many companies have adopted decentralized production and procurement strategies to reduce tariff risks. For example, iRobot has moved part of its production lines to Malaysia, and Dyson has production bases in both Singapore and Malaysia (Dyson Company).
At the same time, Chinese brands began to reduce their reliance on the US market and instead focus on developing non-US markets, especially in Europe and Asia. Data from the first quarter of 2024 showed that Chinese brands such as Anker Innovations, Dreame, ECOVACS, ILIFE, Lefant, Narwal, Roborock, and Xiaomi accounted for more than 60% of the global smart vacuum cleaner market, and their year-on-year share continued to grow (IDC Smart Vacuum). This trend reflects the increasing competitiveness of Chinese brands in non-US markets, especially in regions where smart home demand is growing.

Domestic market competition intensifies.

With the decline in international market demand, competition in China's domestic vacuum cleaner market has become increasingly fierce. oo compete for market share, brands have attracted consumers by lowering prices, resulting in a decline in overall market prices and a compression of profit margins. According to market analysis in 2024, China's vacuum cleaner market is expected to have revenue of US$11.883 billion in 2024 and is expected to grow to US$24.341 billion by 2030, with a compound annual growth rate (CAGR) of 10.8% (China Vacuum Market).
Fierce competition has also driven Chinese brands to increase their investment in technological innovation, especially in the smart home sector. The combination of AI and Internet of Things (IoT) technology has accelerated the iteration of smart vacuum cleaners (such as AI vacuum cleaners). For example, at the 2023 IFA Technology Show, several manufacturers showcased new smart vacuum cleaners that emphasized high suction power, long battery life, and smart control functions.

US Market: Challenges and Opportunities Coexist

In the US market, Chinese-made vacuum cleaners are facing significant pressure due to rising tariffs. Reports in 2018 pointed out that vacuum cleaners are one of the categories most affected by tariffs, with the United States importing about $1.81 billion worth of vacuum cleaners from China in 2017 (Trade War Impact). Data for 2024 estimates that the United States imports about $1.4 billion worth of vacuum cleaners from China (based on a monthly extrapolation of $118 million in October 2024 export data, assuming the same throughout the year), reflecting a decline in imports.
Tariffs have led to higher prices for Chinese-made vacuum cleaners, and some consumers have turned to other brands, especially weakening demand for low-priced vacuum cleaners. However, the demand for smart vacuum cleaners continues to grow, and Chinese brands such as Xiaomi and Ecovacs have occupied a certain share in the US smart home market with their smart technology and lower prices. According to data from the first quarter of 2024, although iRobot still dominates in the United States, Japan, the United Kingdom, and Canada, the market share of Chinese brands is expanding (IDC Smart Vacuum).
In response to tariff pressure, some manufacturers have moved their production bases to Southeast Asia. For example, the number of vacuum cleaner units imported by the United States from Vietnam in 2024 was 21 million, accounting for 21% of total imports, showing a significant impact of production transfer (US Vacuum Market).

Summary and Outlook

The impact of the Sino-US tariff war on the household vacuum cleaner industry is multifaceted: production is transferred to Southeast Asian countries to circumvent tariffs, supply chain adjustments are made to reduce risks, Chinese brands face price competition in the US market but still have room for growth in the field of smart vacuum cleaners, and at the same time, intensified competition in the Chinese domestic market drives innovation.