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Why antidumping duties stand

ITC: Dropping them would harm U.S. industry

Heath E. Combs -- Furniture Today, January 7, 2011

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WASHINGTON - The U.S. International Trade Commission has posted a 201-page public report containing its views and the information it considered during its recently completed sunset review of antidumping duties on wooden bedroom furniture from China.
     After the sunset review process, the agency decided to leave the duties in place for another five years.
     The initial order placing antidumping duties on Chinese wood bedroom imports was issued in 2004 after the U.S. government concluded that those products were unfairly priced too low.
     The newly released report contains a summary of information the ITC collected during the 2010 review process from importers, domestic manufacturers, trade associations and purchasers.
     The commission determined in November that revoking the duty order would harm U.S. furniture manufacturers. It ruled in December to keep the duties in place.
     In the new report, the commissioners said they "have found that revocation of the antidumping duty order on (wood bedroom furniture) from China would likely result in a significant increase in subject import volume that would likely undersell the domestic like product, thereby depressing or suppressing domestic like product prices to a significant degree.
     "We find that the likely volume and price effects of the subject imports would likely have a significant adverse impact on the production, shipments, sales, market share, and revenues of the domestic industry.
     "These reductions would have a direct adverse impact on the industry's profitability and employment as well as its ability to raise capital and make and maintain necessary capital investments.
     "We therefore conclude that, if the antidumping duty order were revoked, subject imports would be likely to have a significant adverse impact on the domestic industry within a reasonably foreseeable time."
     The ITC also noted that there is more support for the continuation of the order now than there was for the petition during the original investigation, especially with the support of labor unions.
     During the review, the ITC reported that it received questionnaire responses from 57 domestic manufacturers that accounted for virtually all known U.S. production of wood bedroom furniture.
     It also reported receiving "usable" importer questionnaire responses from 98 importer firms and 35 Chinese producers. But the public report did not disclose how much they contribute to total U.S. furniture sales volume.
     The report also addressed the issue that the antidumping duties diverted U.S. bedroom furniture purchases from China to Vietnam, but two commissioners said that business was "generally limited to the lower ranges of the (wooden bedroom furniture) market."
     Commissioners also noted that the duties have had a stabilizing impact for the domestic industry, while the Chinese industry has experienced declines in wooden bedroom furniture exports to the U.S.
     "Deficient demand during the housing crisis and recession does not explain these patterns. Rather, they correspond closely to the imposition and later strengthening of antidumping duties," the report said.
     The report also said that several respondents argued that the commission should recognize settlement payments as part of its review.
     Some Chinese manufacturers have made settlement payments to the U.S. companies that originally petitioned for the antidumping review as a way to avoid the administrative review process, an annual review of a factory's duties to determine whether its rates should be adjusted.
     The petitioners can legally withdraw from review the companies that make such payments. The ITC said the settlement payments were "not relevant" to its decision on whether to leave the antidumping duties in place.
     "To the extent that some respondents have argued that these settlement agreements warrant scrutiny under U.S. antitrust laws, we note that the Commission is not charged with enforcing those laws," the report said.
     Commissioner Daniel Pearson, however, attached a statement to the report saying the settlement agreements raised "troubling questions."
     He added that "additional costs and distortions have been added by the use of the administrative review and settlement process, with little evidence that these distortions have yielded any benefits to the industry overall, the U.S. consumer, or the U.S. taxpayer."
     The report says that about 57 firms continue to make wooden bedroom furniture in the United States, compared with about 50,000 in China.
     The ITC reported that since the start of the antidumping case in 2004, two U.S. wooden bedroom furniture plants have opened and one plant has partially reopened, while 36 plants have closed.
     The full ITC report is available online at www.usitc. gov/trade_remedy/731_ad_ 701_cvd/investigations/2009/ wooden_bedroom_furniture/ PDF/PUB4203.pdf.
     WINNIPEG, Manitoba - Manufacturer Buhler Furniture will introduce its first bedroom groups and a line of smaller-scale electric fireplace units/entertainment centers at the Canadian Home Furnishings Market in Toronto, which runs Jan. 15-18.
     In addition, the company has hired David Falk as executive vice president, with responsibility for sales and marketing in its Retail, Commercial and Glass divisions. Falk, who reports to owner and President Doug Buhler, spent 12 years in the transportation industry before joining the company.
     "David led a tremendously successful sales force in an industry that faced many of the same issues that the furniture industry is now experiencing. His proven success in sales and business development will be a tremendous asset to our longterm strategic growth plans," said Buhler.
     At the Toronto show, Buhler is moving to a larger space of 5,200 square feet in the International Centre's Source of Furnishings & Accessories (SOFA) area, Suite 212.
     While the company continues to offer its line of curios and electric fireplaces/entertainment units in North American oak and maple, it also will show its first three bedroom groups in Toronto. The mid-priced line covers transitional, contemporary and traditional styles, Falk said.
     Also on tap for Buhler is a new Small Space Therapy line of fireplace/entertainment units, which the company says are "perfect for condo and apartment living."

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