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July 10, 2004 Dumping Laws Mean Higher Prices For Consumers The July 3 editorial “Dumping on China” hit the mark by pointing to the Chinese wooden bedroom furniture case, in which the Department of Commerce issued preliminary duties of up to 198 percent on imports last month, to illustrate our government's hypocritical and alarming market-distorting policies, especially against China. The furniture case is a classic example of what is wrong with the dumping laws and with how they are applied. The duties for most of the Chinese companies were relatively low, showing that it is not dumping that is causing the problems of U.S. furniture manufacturers. The duties are high enough, however, and for some companies, extraordinarily high. This will in effect place a new furniture tax on U.S. consumers, who will be forced to pay higher prices for bedroom furniture. And for what? The duties will do nothing to help the domestic industry restructure. Instead, those few U.S. furniture manufacturers who filed the petition and who haven't accepted and adapted to the global marketplace will be rewarded with a big pot of taxpayer money for their inefficiency thanks to the Byrd Amendment — a U.S. law that directs the dumping duties into the pockets of the petitioners instead of to the U.S. Treasury. Thanks to this law, petitioners had a $6.6 million per company per year motivation (a conservative estimate!) just to file the petition. It's easy to explain why the companies supporting the petition argued for such high duties — as high as 440 percent — when looking at the potential for massive pay-outs. Now as the International Trade Commission continues its investigation into the case, the question remains: Will furniture jobs come back to the U.S. like the petitioners argued? The answer is no. (In fact the petitioners themselves are in Vietnam and other countries to find new sources of supply instead of hiring more workers in the U.S.) Will consumers be the ones to get badly burned, having to pay millions to each petitioner? Yes. Is it unjust, needless, excessive and just plain foolish? You bet. Harvey Silverstone
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