American mattress producers that lodged an anti-dumping complaint against China applauded the U.S. Department of Commerce for its preliminary determination May 29 to impose import duties.
“We are thrilled that Commerce has confirmed that Chinese producers are relying on significant dumping margins to unfairly compete in the U.S. market with margins as high as 1,731.75 percent,” Yohai Baisburd, lead counsel for the petitioners, said in a news release.
Dumping occurs when foreign producers export goods into another market for less than “normal prices,” usually with the intent of injuring competitors and forcing them out of business.
Some analysts said the penalties proposed by the Commerce Department, as low as 38 percent of the cost of the Chinese mattresses, are generally less than expected and may not be enough to keep all the targeted products out of the U.S. market.
High duties were expected
“Most industry participants we spoke with over the last six months were expecting a rate of at least 100 percent, and we have discussed in prior notes that a rate between 100 percent to 150 percent was necessary to fully level the playing field,” wrote Bobby Griffin of Raymond James, according to Furniture Today.
Retailers that carry U.S. brands or mattresses imported from countries other than China still could benefit from the decision, at least for a few months, until producers move operations from China to other Asian countries.
Some, such as Jason Fletcher of Home Furnishings Association member American Furniture Warehouse in Greensboro, N.C., say it’s too soon to assess potential gains from a boost in sales of U.S.-made mattresses.
“Most people are focused on tariffs and are not aware of the anti-dumping thing happening at the same time,” Fletcher said.
The complaint was filed last year by Corsicana Mattress Co. of Dallas, Texas; Elite Comfort Solutions of Newnan, Ga.; Future Foam Inc. of Council Bluffs, Iowa; FXI Inc. of Media, Pa.; Innocor Inc. of Red Bank, N.J.; Kolcraft Enterprises Inc. of Chicago;, Leggett & Platt Inc. of Carthage, Mo.; Serta Simmons Bedding LLC of Atlanta; and Tempur Sealy International Inc. of Lexington, Ky.
Importers must pay deposits
The Commerce Department launched an investigation and announced a preliminary finding “that exporters from China have dumped mattresses in the United States at margins ranging from 38.56 to 1,731.75 percent,” it said in a news release, referring to the amounts that prices were lower than normal. As a result, “Commerce will instruct U.S. Customs and Border Protection to collect cash deposits from importers of mattresses from China based on the preliminary rates noted above.”
“Today’s announcement and the collection of dumping duties are necessary steps to allow us and the whole U.S. mattress industry to compete on a level playing field with Chinese producers,” Christos Chrisafides, president of Elite Comfort Solutions, said in a news release.
The highest rate reflects the discovery of an invoice “demonstrating pricing of $18 per mattress for the sale of Chinese-origin adult-sized mattresses in the United States,” the Commerce news release said.
The collection of deposits from importers will be retroactive to 90 days prior to publication in the Federal Register of the preliminary determination, which is expected soon. The Commerce Department said it plans to announce a final determination in October. If that affirms the earlier decision, it will be up to the U.S. International Trade Commission to issue a final ruling. That would happen “on or about November 24, 2019,” the news release said.
Relief for U.S. mattress producers
In 2017, imports of mattresses from China were valued at an estimated $436.5 million, according to Commerce. It added:
“Antidumping and countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of the unfair pricing of imports into the United States. Commerce currently maintains 481 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.”
The point was reinforced by Ryan Trainer, president of the International Sleep Products Association, based in Alexandria, Va.
“U.S. sleep products manufacturers invest heavily in research, technology and marketing to develop, manufacture and sell world-class products in the United States and globally that provide consumers a safe and restful night’s sleep,” Trainer said in an ISPA Member Alert May 29. “They have the right under U.S. law and global trade rules to compete on a level playing field. Today’s action is an important step in addressing these unfair international trade practices.”
HFA members who sell sleep products made in the U.S. or in other countries not subject to anti-dumping duties could market them as “fair trade” mattresses, an industry analyst speaking on background said.
A Commerce Department fact sheet is here.
Doug Clark is content manager and government relations liaison for the Home Furnishings Association. Contact him at 916-757-1167 or firstname.lastname@example.org