CHARLOTTE, N.C. - Furniture retailers are bracing for sharp increases in the price of bedroom furniture, with the Commerce Department expected to impose duties today in reaction to alleged dumping by Chinese manufacturers.
The move comes after months of lobbying by some U.S. furniture makers, who contend that the Chinese dumped $1.4 billion in wooden bedroom furniture in the United States in 2003. Retailers and other U.S. furniture makers who have manufacturing operations in China are opposed to duties.
Some manufacturers are guessing that duties on select products could range from percentages in the single digits up to 100 percent, but retailers said they could be higher.
The duties would be on imports that are dumped, or sold below cost. They would be imposed once news about them is published in the Federal Register, which typically takes about a week.
Some furniture manufacturers say Chinese imports have hurt their businesses. The number of workers making wooden bedroom furniture, many of them in North Carolina, fell by about 24 percent to 29,555 between 2000 and mid-2003, according to the U.S. International Trade Commission, an independent federal agency that is investigating the dumping charge.
China's share of the U.S. market for wooden bedroom furniture has increased sharply to 27.8 percent in mid-2003, up from 10.3 percent in 2000, the commission found. U.S. manufacturers' share of the domestic market fell to 42.7 percent from 59.8 percent in the same period.
China's share is growing because of artificial subsidies and market manipulation intended to aid the furniture industry, said Doug Bassett, vice president of sales at Vaughan-Bassett Furniture Co. in Galax, Va., a maker of bedroom furniture that has taken the lead in the campaign for duties.
Closely held Vaughan-Bassett, which had $146 million in 2003 revenue, employs about 1,500. Two years ago, it laid off 250 people at an Atkins, Va., factory, largely because of Chinese dumping, Bassett said.
"Product is being dumped in this country at below the cost it would take anybody else to produce it," said Edward M. Tashjian, vice president of marketing for Century Furniture in Hickory, N.C.. "It artificially reduces prices at retail, which makes our product noncompetitive. This impacts every North Carolina furniture manufacturing facility."
It was complaints by Vaughan-Bassett, Century and 29 other firms allied in the Committee for Legal Trade that prompted investigations by the Commerce Department and the International Trade Commission.
The Commerce Department reviewed whether dumping occurred and to what degree, a spokesman said. Its preliminary decision on duties will be announced today. The trade commission is investigating whether U.S. trade has been injured and is expected to issue a report in December.
About 60 retailers formed the Furniture Retailers of America to oppose the duties. "This case is not about saving jobs. It's about who controls the manufacturing," said Erik O. Autor, a spokesman for the group, as well as the international trade counsel for the National Retail Federation.