The trade petition filed against wooden bedroom furniture from China was filed by a group of domestic furniture manufactures in order to receive millions of dollars in special interest taxes. A conservative estimate is that annual payouts will equal $180 million or nearly $6.6 million per company.

Background: The Byrd Amendment

The Continued Dumping and Subsidy Offset Act (CDSOA), widely known as the "Byrd Amendment," mandates distribution of antidumping and countervailing duties to companies that support petitions to the U.S. Government for trade protection, rather than to the U.S. Treasury, where other duties are sent. To date, the U.S. Government has paid more than $700 million to U.S. companies that have supported antidumping and countervailing duty petitions. To be eligible to receive funds, a company must be one of the petitioners or otherwise actively participate in the antidumping investigation and support the imposition of antidumping taxes.

In 2003, the World Trade Organization (WTO) found that the Byrd Amendment violates WTO agreements and distorts trade. The Congressional Budget Office (CBO) recently issued a report confirming that the Byrd Amendment is harming the U.S. economy, and also found that it encourages the filing of more antidumping and countervailing duty trade cases (which force up the cost of affected imported products to retailing industries), and estimates that Byrd Amendment distributions to U.S. companies that file successful trade cases will total more than $3.8 billion by 2014.

A $ 6.6 Mil. Motivation for Filing Furniture Petition

In 2003, wooden bedroom furniture imports from China were worth $1.2 billion dollars. Even with a conservative assumption under the Department of Commerce’s methodologies of a 20% average dumping margin and a corresponding 20% reduction in imports, annual payouts under the Byrd Amendment to the domestic industry would average $6.6 million per company (based on 28 domestic producers that are either part of the petitioning group or have publicly supported the petition). The duties could have even less of an effect on import levels, which would cause the payouts to the domestic industry to increase further.

In other moderate estimates, at 50% dumping margins and a 50% reduction in imports, annual payouts to the domestic industry would average $10.4 million per company. And finally, if antidumping margins average 100% and cut off nearly three quarters of imports, annual payouts to the domestic industry would average $10.4 million per company.

Byrd Amendment payouts explain why the companies supporting the petition argue for the imposition of unreasonably high duties — as high as 440%! And all of this subsidy will come right from the pockets of American retailers and their customers through the taxes that would be imposed on imported bedroom furniture.