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Thu, Nov 11, 2004 - Page 12 News List

US rules against China's bedroom furniture

YOU MADE YOUR BED Furniture makers who complained about cheaper Chinese products may now face higher prices and lower sales, which could bankrupt them


The US government on Tuesday upheld a ruling that Chinese bedroom furniture was being sold in the US at unfairly low prices, but it scaled back the level of penalty tariffs.

The action represented at least a partial victory for US retailers who contended the Chinese furniture was not being sold in the US at a price below the cost of production, a practice known as dumping.

US furniture makers have argued that a surge in Chinese furniture has forced plant closings and 35,000 layoffs, with much of the injury concentrated in Southeastern states. They contend that Chinese companies are unfairly pricing their products in the US.

US manufacturers had petitioned the Commerce Department's International Trade Administration to impose penalty tariffs, known as antidumping duties, to make the products more expensive to American consumers and give them a better chance of competing.

China supplies about half of the imported bedroom furniture coming into the US, an amount that totaled US$1.2 billion last year.

The ruling Tuesday lowered the penalty tariff for 115 Chinese companies, accounting for roughly 65 percent of Chinese furniture imports, to 8.64 percent, down from the preliminary tariff of 12.91 percent.

A smaller group of six companies accounting for roughly 35 percent of Chinese furniture imports will face penalty tariffs ranging from 2.22 percent to 16.7 percent.

Representatives of US retailers who had been fighting the dumping duties were encouraged.

"We see the reduced rates as positive news, and a very clear indication from Commerce that the domestic industry's problems are not the result of Chinese imports," said Mike Veitenheimer, spokesman for the Furniture Retailers of America.

Government officials had no estimates of how much of an impact the penalty tariffs will have on US consumers, but the National Retail Federation said consumers will feel the pinch.

"This is going to drive prices up for consumers, drive sales down for retailers and could ultimately put some furniture stores out of business," said Erik Autor, vice president of the retail federation.

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