Get ready for duties, cool the rhetoric, Epperson advises
By Powell Slaughter -- Furniture Today, February 8, 2004
SAN FRANCISCO — Get ready for duties, worry about relevant issues, and tone down the rhetoric.
That's the gist of industry analyst Jerry Epperson's take on the antidumping petition targeting wood bedroom from China.
Epperson, managing director of Mann, Armistead & Epperson, said in a presentation at the market here that debates on the issue have generated more heat than light. Supporters and opponents, he said, have spent too much time arguing the legality of Chinese business practices on the one hand, and the fairness of U.S. antidumping law and the petitioners' legitimacy on the other.
"I'm so tired of people writing and yelling things that don't have anything to do with how this will play out," Epperson told an audience of 126 that packed the Mart 1 ninth-floor ballroom. "We have friends on both sides of this issue, but I'm probably going to make everyone in this room mad at me today."
His bottom-line guess: better-than-even odds for tariffs between 40% and 60% on wood bedroom furniture from China. He based that on the 6-0 vote by the International Trade Commission in January in a ruling that favored the petitioners.
"What they would do is put a tariff on it that makes it equivalent to product made in the United States. (Chinese) bedroom wouldn't be priced out of the market, but (U.S. goods) will be more competitively priced," he said.
Epperson has two major concerns about the petition's effect on the industry: that a successful petition may not result in more U.S. jobs, and that the petition process has distracted manufacturers and retailers from other, equally important issues.
"If we don't get more jobs, this whole thing has been a terrible test of all our fortitude with the time and effort involved," he said. "There are huge issues our industry is facing.... Business is getting better, but our retailers are distracted."
He noted that 30% of furniture sales take place outside the traditional furniture store channel, and the industry must address that emerging retail competition from mass merchandisers and other outlets.
Both sides in the petition debate are guilty of bringing too much emotion into the argument, Epperson said.
"I don't like the phraseology of the petitioners — 'legal' implies someone's doing something wrong." he said. "I don't like patriotism being brought into this.... We shouldn't refuse the reality of what's going on."
He characterized the petition as "protectionist."
"The only reason that we've been free-trade for so long is that we were the ones seeking to open markets to our goods," Epperson said.
He added that opponents need to remember the petitioners are using a trade remedy with a strict burden of proof. The petitioners, he said, are well within their rights to pursue their goals through a legitimate process.
"One of the things we keep hearing is, 'It isn't fair!' " Epperson said. "This is stuff written by lawyers. What do you expect? Get over it. If you spend $40,000 on a new sports car, is it fair you have to drive it 55 miles per hour?"
He expects the petition effort will lead Chinese manufacturers to work harder to control their own destiny in the U.S. market.
"I think the Chinese will go direct to retailers," he said. "The Chinese will own retail."
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