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Home Furnishings Association members talk tariffs in Washington

Unseasonably cool weather greeted Home Furnishings Association members visiting Washington, D.C., last week, but one topic heated Capitol Hill conversations: Tariffs.

“In no scenario does it help our industry to have tariffs,” Larry Zigerelli, president and CEO of FFO Home in Fort Smith, Ark., told a senior aide to Senate Majority Leader Mitch McConnell.

If one goal is to shift furniture production from China to Vietnam or other countries, he added, tariffs will have little effect. “The idea that manufacturing will go somewhere else is not feasible,” he said.

Two days of meetings

Zigerelli was part of a group representing Home Furnishings Association member businesses from Oregon to Florida. They met with congressmen and key staffers May 14 and joined an American Home Furnishings Alliance delegation for more talks the next day.

The annual Washington Fly-in gives HFA participants the chance to question and present concerns to elected representatives, regulatory agency leaders and other policymakers. The furniture retailers took full advantage.

While most Republican lawmakers expressed a preference for free trade, they defended President Trump’s use of 25 percent tariffs on products imported from China as a negotiating tactic.

“Right now, I’m willing to give the president some leeway,” Sen. Thom Tillis (R-N.C.) said.

Zigerelli repeatedly stressed that tariffs are taxes ultimately paid by American consumers, as the price of an $800 piece of furniture could be pushed to $1,000 when 25 percent is added to the retailer’s cost. Since home furnishings products are usually discretionary purchases, tariffs also tend to depress sales.

But U.S. Rep. Ted Budd (R-N.C.) argued that a strong economy gives the U.S. the upper hand in a tariff battle with China.

“We’re going to match them pound for pound,” Budd said. “This president is not going to let us be taken advantage of.”

Tariffs slow economic growth

Tariffs are likely to slow economic growth, Eric Blackledge of Blackledge Furniture in Corvallis, Ore., told Tim Pataki, director of the White House Office of Public Liaison.

“Our goal at the end of the day is not tariffs but to expand market access,” Pataki said. “If we don’t make real changes now that are enforceable, we’ll have real problems in 10 years.”

Cynthia Heathcoe said she has problems now. The HFA’s 2017 “Emerging Star” award winner is closing her store, Contemporary Living in Palm Beach, Fla. The impact of tariffs is one factor, she said.

“How many of the mom-and-pop stores have to go? How bad does it have to get?” she asked Erica Suares, a policy adviser for McConnell.

McConnell understands the pain that tariffs inflict, Suares said, but he isn’t ready for Congress to try to block them. “I wish I had some better news on this front,” she said.

Matt Schewel, of Schewels Furniture in Lynchburg, Va., left the meetings appreciative that HFA members were able to make their voices heard.

Trade war likely to continue

“Unfortunately, my major takeaway on trade was that tariffs on furniture imported from China are not going away any time soon,” he said. “Several House and Senate Republicans made clear that while they oppose tariffs, they are willing to give the president wiggle room to try to find a solution to the U.S.-China trade conflict because they believe China is an economic, geopolitical and military threat that has to be addressed now, and because they think the U.S. is in a stronger economic position than China to weather the trade war.”

Schewel, who worked as a Washington journalist covering trade policy until joining his family’s furniture business three years ago, took extensive notes during the two days. Regarding Suares’ presentation, he wrote: “She said that because McConnell has a direct channel of communication to the president, he sees his role as privately conveying to the president that tariffs are hurting businesses and consumers. She urged businesses to tell her their stories so they could pass them on to the White House.”

Furniture retailers should act on that advice, telling their stories to their own representatives in Congress and through the Home Furnishings Association. HFA seeks to further magnify its voice through partnerships with other business organizations, such as the National Retail Federation, and by joining coalitions. One of those, Americans for Free Trade, strongly pushed for the elimination of tariffs on steel and aluminum made in Canada and Mexico. The U.S. agreed Friday to drop those tariffs.

Doug Clark is content manager and government relations liaison for the Home Furnishings Association. Contact him at 916-757-1167 or dclark@myhfa.org

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