Global Trade Impacts Bedding Industry

There has been a lot of talk in the news lately about trade, as the US administration continues to roll out new tariffs on Chinese goods. While initially not expected to have much of a direct impact on the bedding industry, the effects of this so-called trade war are starting to hit closer to home.

Due to their cumbersome nature, mattresses have traditionally been manufactured stateside. But today’s manufacturing and packing technologies, combined with new advanced shipping means, have lessened the once prohibitive cost of transporting the products overseas, allowing for an influx of affordable imports from other countries around the world. New access to these imports has enabled some manufacturers to produce mattresses and their components at lower costs, but it also puts domestic manufacturers at a disadvantage.

The total share of imported mattress sales jumped from 9% to 15% over the past year, according to Jerry Epperson, managing director of Mann, Armistead & Epperson Ltd (which provides research analysis to the International Sleep Products Association).

In particular, American companies have been increasingly worried about the growing number of low-cost mattress imports coming in from China. In 2017, mattress exports from China to the US hit $427 million - up nearly 160% from the year before. This growing competition of cheap mattresses has even prompted some to consider lodging an “anti-dumping trade complaint” with the US government.

The White House is already fighting back against China - and this new trade war is now starting to hit the mattress market. After introducing two rounds of tariffs that were predominately focused on raw materials, the US administration recently introduced a third round of proposed tariffs that would extend to consumer goods as well. While they would not go into effect for at least two months, these new tariffs would be 10% on $200 billion worth of Chinese imports - including furniture and mattresses (among others).

While these tariffs could be beneficial to American mattress manufacturers that source materials in the states, particularly those that are already struggling to compete against new low-cost sleep products, there is still risk involved here. Many American manufacturers have found great success selling their American-made beds internationally. These manufacturers are now concerned about the possibility of retaliatory tariffs on American exports.

We are already starting to see this from countries like Canada. Following the US administration’s recently imposed tariffs on steel and aluminum, the Canadian government introduced a list of “retaliatory tariffs” that include 10% duties on 79 American-made products, including mattresses.

According to the Retail Council of Canada, Canada imported $174 million in mattresses and bedding from the United States in 2017. New tariffs will likely decrease the number of imports from the US - and ultimately have an impact on retail price inflation throughout the country. Similarly, the EU has threatened the US with additional tariffs of their own, on everything from cotton fabrics to bed linens and down or feather-filled bedding.

Could this be a major blow to American mattress and bedding manufacturing, which has been steadily expanding its global distribution in recent years?

We believe it could. So, while tariffs may help protect US manufacturers against the dumping of low-cost foreign goods into the marketplace, they could also hinder further growth. When it comes to a trade war such as this, the question is ultimately: is the reward worth the risk?

Read more here, here and here.

This article originally appeared in Sleep Retailer eNews on July 12, 2018

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