• Thomas Russell

Some furniture retailers surprised with high duties on imports

HIGH POINT — High duties assigned to Chinese wood bedroom producers have started to hit some unsuspecting retailers who have purchased goods imported from the factories.

That is causing concern not just for those retailers, but others who could be faced with such bills in the future.

The situation has arisen because when they bought the product, some retailers had allowed themselves to be named as the importer of record. Some were advised by an agent or supplier that they could save money as an importer of record, while others assumed the role as they purchased from the factory directly.

The importer of record in antidumping cases is typically responsible for paying a duty assigned to a particular factory. This classification is normally assigned to importers, but some retailers apparently had signed paperwork that identified them as importers of record.

The duties are aimed at leveling the playing field for U.S. bedroom producers the government has determined have been injured due to unfairly priced imports. Assigning duties to various Chinese producers is one way to discourage people from buying from those companies.

Being importer of record wouldn't normally be a major concern because most initial duties are in the 7% range. But those relatively low duty rates aren't guaranteed over the long term. During an annual review of factories performed by the U.S. Department of Commerce, a factory can be assessed at a higher rate.

That's what happened with Lynchburg, Va.-based Top 100 Retailer Schewel Furniture. Marc Schewel, president, said that his store got hit with duties over 200% when a factory was audited for its 2007 shipments, which were just recently liquidated by U.S. Customs & Border Protection.

That increase in the duty rate - plus interest assessed by the U.S. government - resulted in a six-figure penalty that the store ended up paying, Schewel said.

"It's a pretty unfortunate situation," he said. "You can go on and on about it, but there is a fairness issue that is not being addressed.... We were able to absorb it, but with some smaller retailers, this is a significant expense for them and they are having a hard time."

While it was importer of record for these particular shipments, Schewel said the company hasn't since taken on that designation.

"I think we are out of it at this point," he said. "These last bills we received are the end of it. It was a big hit, but it appears we didn't have any recourse but to pay."
Other Top 100 stores also have been hit with retroactive duties.

Salt Lake City-based R.C. Willey was importer of record for some shipments from around 2007 that were originally in the 7% range. Company President Jeff Child declined to name the factory or say how much of a penalty it was assessed.

He did note that the company has paid one bill already and is dealing with another one now. Eventually, though, he expects the issue to be a moot point.

"We don't think we are getting any more retroactive bills," he said, noting that the original duty was significant. "It wasn't long after the 2007 time frame that we decided not to be importer of record."

Thomas RussellThomas Russell | Associate Editor, FurnitureToday

I'm Tom Russell and have worked at Furniture/Today since August 2003. Since then, I have covered the international side of the business from a logistics and sourcing standpoint. Since then, I also have visited several furniture trade shows and manufacturing plants in Asia, which has helped me gain perspective about the industry in that part of the world. As I continue covering the import side of the business, I look forward to building on that knowledge base through conversations with industry officials and future overseas plant tours. From time to time, I will file news and other industry perspectives online and, as always, welcome your response to these Web postings.

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