Last week the U.S. International Trade Commission voted unanimously to extend the controversial antidumping duties on imports of Chinese wood bedroom furniture for another five years. Without the duties, ITC members contend, U.S. furniture makers would likely face a new round of "material injury."
That's the same logic that the ITC expressed back in December 2004 when it reaffirmed an earlier ruling in favor of the antidumping petition filed by the American Furniture Manufacturers Committee for Legal Trade. Then as in now, the ITC voted 6-0 "that a U.S. industry is materially injured by reason of wooden bedroom furniture from China that the Department of Commerce has determined are sold in the United States at less than fair value."
The antidumping petition was originally filed in 2003 by a group of more than two dozen U.S. furniture manufacturers and a pair of furniture unions led by Vaughan-Bassett Furniture of Galax, VA. The petition immediately created a wide rift in the domestic furniture industry, not only pitting U.S. furniture makers against their Chinese competitors, but also amongst U.S. retailers and furniture makers -- most notably Furniture Brands International -- that were sourcing wood bedroom furniture from China.
The new ITC ruling upholds the imposition of duties ranging as high as 198%. The Furniture Retailers of America, a group that staunchly fought against the antidumping petition, called the ITC's 2004 decision "unwarranted" and a "tax on U.S. consumers."
Making the antidumping order ever the more controversial is that members of the American Furniture Manufacturers for Legal Trade have divvied up tens of millions of dollars in duties as allowed by the so-called Byrd Amendment over the past five years.
Vietnam a Winner, too
In addition to sparking a civil war in the U.S. furniture market and benefitting the petitioners with the spoils of the antidumping order, the imposition of duties has benefitted Vietnam's fast-growing furniture industry. Many Chinese manufacturers shifted production there and some U.S. importers have chosen to source product from there to skirt the duties.
The duties may have helped prop up some domestic manufacturers, but I'm not aware of any of the participants announcing major expansions or investments in new plants, let alone the emergence of new domestic players to make wood bedroom furniture.
In addition, I'm a little surprised that the success of the wood bedroom furniture petition did not spawn similar attempts by manufacturers of other types of household furniture, like dining room and living room furniture.
Last month, however, a group of U.S.-based wood flooring manufacturers, under the banner, The Coalition for American Hardwood Parity, filed an antidumping petition against Chinese imports of engineered wood flooring. The CAHP, which represents Anderson Hardwood Floors, Mannington, Shaw and others, is seeking counterveiling duties in excess of 100 percent.
Based on the ruling by the ITC to extend the wood bedroom furniture duties, the group's timing would seem to be as good as it gets.
Rest assured, we'll be watching with interest to see how this all plays out and keep you posted in the process.
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