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September 14, 2023
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June 12, 2019
Furniture manufacturers, retailers eye impact of tariffs
Hassell Franklin doesn’t like tariffs or the effect they have on his business and customers.
But the result, he hopes, will be worthwhile.
“There’s an old adage – it’s difficult to produce gain without pain,” said Franklin, the founder and chairman of Franklin Furniture Corp. in Houston, one of the nation’s largest suppliers of recliners and motion furniture.
President Donald Trump announced last month that the U.S. would levy a 25-percent tariff on another $200 billion of Chinese imports, and a swath of furniture-related components are affected this time.
Franklin supports the Trump administration’s and other economic experts’ view that China has been stealing intellectual property rights and dumping goods in the U.S. market to undercut domestic businesses. And Franklin thinks it’s long past time that something was done to level the playing field.
“But it is painful for the consumer,” Franklin admitted. “A 25-percent increase for manufacturers like us will be passed along to the dealers, and the dealers will have to pass that along to the consumer. I just hope that it will be resolved quickly, but I really think that in the end it will work out. It’s just going to hurt a bit.”
Last year, a 10-percent tariff on steel and aluminum raised costs on components like recliner and sleeper mechanisms, but they were more easily absorbed by manufacturers.
The new tariffs are a different story, and manufacturers won’t be eating all the costs this time.
Northeast Mississippi has long been a manufacturing hub for decades, and making upholstered furniture – sofas, love seats, recliners and chairs covered in fabric and leather – has been a staple of the region’s economy. But during that time, the fabrics used by hundreds of manufacturers has evolved from being domestically sourced to primarily import-sourced.
Furniture manufacturers have had little choice but to buy from overseas as their suppliers have closed their factories in the U.S. Besides fabrics and cut-and-sew kits, other key components used across the furniture industry include fiber, springs, plastic packaging, mechanisms and motors.
Price increases for those components have manufacturers and retailers alike scrambling to figure out their next move.
Lisa Hawkins, owner of Room to Room Furniture in Tupelo, said some vendors are adding tariff surcharges to their shipments. Others are taking a wait-and-see attitude for now.
“Most of our manufacturers are waiting until July 1 to make some major price changes, but in the meantime, some are putting a tariff surcharge, much like they tacked on a fuel surcharge back when gas prices went way up a few years ago,” she said. “Not everybody is doing it yet, but the situation is very fluid. I think they’re scrambling to see what they’re going to do.”
According to a Reuters report last week, some retails and vendors are canceling or pausing orders coming from China, while others are imposing tough new contract terms, rerouting sourcing and discussing ways to share costs with each other.
“Many have gone to Vietnam for sourcing, and that’s been going on for a few years,” Hawkins said.
The U.S. retail furniture industry is valued at some $114 billion, and China has a major role. According to North Carolina-based investment banking and advisory firm Mann, Armistead & Epperson, which has long been a key furniture industry analyst, the U.S. imported $5.7 billion in wood furniture, $5.3 billion in upholstered furniture, $7.2 billion in “metal and other” furniture and almost $1 billion in mattresses from China for residential use. According to the U.S. Trade Representative’s office, China’s impact is even greater, placing the value of furniture and bedding imported from China at $29 billion.
Skipper Holliman, president of HomeStretch Furniture in Nettleton, said his 450-employee factory will, like others, have to absorb whatever costs it can but will also have to pass along those costs.
“The situation is different for everybody because not everybody does the same thing,” he said. Some manufacturers make greater use of components from Southeast Asia outside of China, and many have increased their own cut-and-sew departments to rely less on kits coming from overseas.
Still, the tariffs will eventually have a ripple affect at every point in the industry, trickling down to the consumer.
Like Frankin, however, Mississippi Manufacturers Association president Jay Moon said additional tariffs will do what they’re supposed to do.
“It’s very selective, and by that I mean that if there’s a tariff particular to a given industry, they may be impacted and others are not,” he said. “Some are benefiting, for example, like aluminum and steel producers in the U.S. But agriculture is getting pretty hard hit, and so is furniture production.”
Moon said tariffs and trade wars are nothing new, and this round is really no different.
“The purpose of free trade agreements is to do away with tariffs so we can compete on the basis of quality and price,” he said. “China violates a lot of trade laws and if we continue to allow them to do that and continue to hurt a lot of our companies in the U.S, we’ve got to have a course correction. Is it painful? Sure it is. Does it hurt more companies and people? It does because that’s the nature of selective tariffs. But in the long run, I think our companies will be able to get into the Chinese markets much like they’ve entered our markets, and eventually I think the course correction will lower the tariffs and possibly eliminate them, so we’re better able to compete on the world stage.
“The key is patience … we have to understand there’s going to be some short-term pain, but we can’t have a rogue player in the game. And it’s not just the Chinese, but others who have violated trade agreements. We have to have a level playing field to better compete.”
https://www.djournal.com/news/furniture-manufacturers-retailers-eye-impact-of-tariffs/article_9ce8c46e-56e2-5e33-946b-b27d3bf0840f.html
June 12, 2019
Furniture manufacturers, retailers eye impact of tariffs
Hassell Franklin doesn’t like tariffs or the effect they have on his business and customers.
But the result, he hopes, will be worthwhile.
“There’s an old adage – it’s difficult to produce gain without pain,” said Franklin, the founder and chairman of Franklin Furniture Corp. in Houston, one of the nation’s largest suppliers of recliners and motion furniture.
President Donald Trump announced last month that the U.S. would levy a 25-percent tariff on another $200 billion of Chinese imports, and a swath of furniture-related components are affected this time.
Franklin supports the Trump administration’s and other economic experts’ view that China has been stealing intellectual property rights and dumping goods in the U.S. market to undercut domestic businesses. And Franklin thinks it’s long past time that something was done to level the playing field.
“But it is painful for the consumer,” Franklin admitted. “A 25-percent increase for manufacturers like us will be passed along to the dealers, and the dealers will have to pass that along to the consumer. I just hope that it will be resolved quickly, but I really think that in the end it will work out. It’s just going to hurt a bit.”
Last year, a 10-percent tariff on steel and aluminum raised costs on components like recliner and sleeper mechanisms, but they were more easily absorbed by manufacturers.
The new tariffs are a different story, and manufacturers won’t be eating all the costs this time.
Northeast Mississippi has long been a manufacturing hub for decades, and making upholstered furniture – sofas, love seats, recliners and chairs covered in fabric and leather – has been a staple of the region’s economy. But during that time, the fabrics used by hundreds of manufacturers has evolved from being domestically sourced to primarily import-sourced.
Furniture manufacturers have had little choice but to buy from overseas as their suppliers have closed their factories in the U.S. Besides fabrics and cut-and-sew kits, other key components used across the furniture industry include fiber, springs, plastic packaging, mechanisms and motors.
Price increases for those components have manufacturers and retailers alike scrambling to figure out their next move.
Lisa Hawkins, owner of Room to Room Furniture in Tupelo, said some vendors are adding tariff surcharges to their shipments. Others are taking a wait-and-see attitude for now.
“Most of our manufacturers are waiting until July 1 to make some major price changes, but in the meantime, some are putting a tariff surcharge, much like they tacked on a fuel surcharge back when gas prices went way up a few years ago,” she said. “Not everybody is doing it yet, but the situation is very fluid. I think they’re scrambling to see what they’re going to do.”
According to a Reuters report last week, some retails and vendors are canceling or pausing orders coming from China, while others are imposing tough new contract terms, rerouting sourcing and discussing ways to share costs with each other.
“Many have gone to Vietnam for sourcing, and that’s been going on for a few years,” Hawkins said.
The U.S. retail furniture industry is valued at some $114 billion, and China has a major role. According to North Carolina-based investment banking and advisory firm Mann, Armistead & Epperson, which has long been a key furniture industry analyst, the U.S. imported $5.7 billion in wood furniture, $5.3 billion in upholstered furniture, $7.2 billion in “metal and other” furniture and almost $1 billion in mattresses from China for residential use. According to the U.S. Trade Representative’s office, China’s impact is even greater, placing the value of furniture and bedding imported from China at $29 billion.
Skipper Holliman, president of HomeStretch Furniture in Nettleton, said his 450-employee factory will, like others, have to absorb whatever costs it can but will also have to pass along those costs.
“The situation is different for everybody because not everybody does the same thing,” he said. Some manufacturers make greater use of components from Southeast Asia outside of China, and many have increased their own cut-and-sew departments to rely less on kits coming from overseas.
Still, the tariffs will eventually have a ripple affect at every point in the industry, trickling down to the consumer.
Like Frankin, however, Mississippi Manufacturers Association president Jay Moon said additional tariffs will do what they’re supposed to do.
“It’s very selective, and by that I mean that if there’s a tariff particular to a given industry, they may be impacted and others are not,” he said. “Some are benefiting, for example, like aluminum and steel producers in the U.S. But agriculture is getting pretty hard hit, and so is furniture production.”
Moon said tariffs and trade wars are nothing new, and this round is really no different.
“The purpose of free trade agreements is to do away with tariffs so we can compete on the basis of quality and price,” he said. “China violates a lot of trade laws and if we continue to allow them to do that and continue to hurt a lot of our companies in the U.S, we’ve got to have a course correction. Is it painful? Sure it is. Does it hurt more companies and people? It does because that’s the nature of selective tariffs. But in the long run, I think our companies will be able to get into the Chinese markets much like they’ve entered our markets, and eventually I think the course correction will lower the tariffs and possibly eliminate them, so we’re better able to compete on the world stage.
“The key is patience … we have to understand there’s going to be some short-term pain, but we can’t have a rogue player in the game. And it’s not just the Chinese, but others who have violated trade agreements. We have to have a level playing field to better compete.”
https://www.djournal.com/news/furniture-manufacturers-retailers-eye-impact-of-tariffs/article_9ce8c46e-56e2-5e33-946b-b27d3bf0840f.html
June 12, 2019
WASHINGTON, May 29, 2019 /PRNewswire/ — Corsicana Mattress Company, Elite Comfort Solutions, Future Foam Inc., FXI, Inc., Innocor, Inc., Kolcraft Enterprises Inc., Leggett & Platt, Incorporated, Serta Simmons Bedding, LLC, and Tempur Sealy International, Inc. (collectively, the “Mattress Petitioners”) applaud today’s US Department of Commerce (“Commerce”) announcement finding dumping by the largest Chinese mattress producers. Commerce announced dumping margins of 38.56 to 84.64 percent for the two mandatory respondents (Healthcare Co., Ltd. and Zinus (Xiamen) Inc.) and applied dumping margins of 74.65 percent to the 33 separate rate companies that demonstrated independence from the Chinese government and 1,731.75 percent to all other Chinese producers, which are referred to collectively as the China-Wide entity. The dumping margin is the difference between the Chinese producers’ US prices and a normal value calculated under US trade law. “We are thrilled that Commerce has confirmed that Chinese producers are relying on significant dumping margins to unfairly compete in the US market with margins as high as 1,731.75 percent,” said Yohai Baisburd, lead counsel to the Mattress Petitioners. The preliminary determination will be published in the Federal Register within a week or so at which time US Customs and Border Protection (“CBP”) will commence collecting cash deposits of dumping duties based on these margins. These dumping duties are in addition to the 25 percent “Section 301” duties the United States has imposed on a variety of Chinese goods, including mattresses. “Today’s announcement and the collection of dumping duties are necessary steps to allow us and the whole US mattress industry to compete on a level playing field with Chinese producers,” said Christos Chrisafides, President of Elite Comfort Solutions. Commerce also found “critical circumstances” with respect to the separate rate companies and the China-wide entity because of a surge in imports after this case was filed on September 18, 2018. CBP will be instructed to collect the cash deposits of dumping duties retroactively for 90 days from importers of mattresses covered by the critical circumstances finding. The Mattress Petitioners believe this action is essential to ensure that the US mattress industry can compete on a level playing field and to allow for future reinvestment and growth for the entire US industry. For additional information please contact the Mattress Petitioners lead counsel, Yohai Baisburd of Cassidy Levy Kent (USA) LLP, at 202-567-2319. SOURCE The Mattress Petitioners https://www.prnewswire.com/news-releases/american-mattress-manufacturers-welcome-the-us-department-of-commerce-preliminary-determination-of-dumping-by-chinese-mattress-producers-300858563.htmlAmerican Mattress Manufacturers Welcome the US Department of Commerce Preliminary Determination of Dumping by Chinese Mattress Producers
June 12, 2019
WASHINGTON, May 29, 2019 /PRNewswire/ — Corsicana Mattress Company, Elite Comfort Solutions, Future Foam Inc., FXI, Inc., Innocor, Inc., Kolcraft Enterprises Inc., Leggett & Platt, Incorporated, Serta Simmons Bedding, LLC, and Tempur Sealy International, Inc. (collectively, the “Mattress Petitioners”) applaud today’s US Department of Commerce (“Commerce”) announcement finding dumping by the largest Chinese mattress producers. Commerce announced dumping margins of 38.56 to 84.64 percent for the two mandatory respondents (Healthcare Co., Ltd. and Zinus (Xiamen) Inc.) and applied dumping margins of 74.65 percent to the 33 separate rate companies that demonstrated independence from the Chinese government and 1,731.75 percent to all other Chinese producers, which are referred to collectively as the China-Wide entity. The dumping margin is the difference between the Chinese producers’ US prices and a normal value calculated under US trade law. “We are thrilled that Commerce has confirmed that Chinese producers are relying on significant dumping margins to unfairly compete in the US market with margins as high as 1,731.75 percent,” said Yohai Baisburd, lead counsel to the Mattress Petitioners. The preliminary determination will be published in the Federal Register within a week or so at which time US Customs and Border Protection (“CBP”) will commence collecting cash deposits of dumping duties based on these margins. These dumping duties are in addition to the 25 percent “Section 301” duties the United States has imposed on a variety of Chinese goods, including mattresses. “Today’s announcement and the collection of dumping duties are necessary steps to allow us and the whole US mattress industry to compete on a level playing field with Chinese producers,” said Christos Chrisafides, President of Elite Comfort Solutions. Commerce also found “critical circumstances” with respect to the separate rate companies and the China-wide entity because of a surge in imports after this case was filed on September 18, 2018. CBP will be instructed to collect the cash deposits of dumping duties retroactively for 90 days from importers of mattresses covered by the critical circumstances finding. The Mattress Petitioners believe this action is essential to ensure that the US mattress industry can compete on a level playing field and to allow for future reinvestment and growth for the entire US industry. For additional information please contact the Mattress Petitioners lead counsel, Yohai Baisburd of Cassidy Levy Kent (USA) LLP, at 202-567-2319. SOURCE The Mattress Petitioners https://www.prnewswire.com/news-releases/american-mattress-manufacturers-welcome-the-us-department-of-commerce-preliminary-determination-of-dumping-by-chinese-mattress-producers-300858563.htmlAmerican Mattress Manufacturers Welcome the US Department of Commerce Preliminary Determination of Dumping by Chinese Mattress Producers
June 11, 2019