Unpacking The Continued Antidumping Debate

Following up on the US Trade Commission (USITC)’s determination in November that stated that unfairly traded mattresses imported from China were causing material injury to the US mattress market, a group of US mattress manufacturers along with two labor unions within the industry submitted a new antidumping petition on March 31, 2020. The petitioning companies included: Brooklyn Bedding, Corsicana Mattress Co., Elite Comfort Solutions, FXI Inc., Innocor Inc., Kolcraft Enterprises Inc. and Leggett & Platt Inc. The petition asks the USITC as well as the Department of Commerce to look into the unfair trade of finished mattresses from seven additional countries to determine if these imports are also causing material injury to the US market. The countries targeted by this petition are Vietnam, Thailand, Turkey, Serbia, Malaysia, Indonesia, and Cambodia.

Formation Of The American Mattress Alliance

In response to the new petition filed on March 31, 2020, a new organization has formed—the American Mattress Alliance (AMA). Members of the group include Ashley Furniture, City Furniture, American Furniture Warehouse, El Dorado Furniture, Malouf, Classic Brands, BedTech, Zinus USA, Americanstar, Maven, Mlily USA, and others. In the past month or so, the AMA has released several key arguments against the petition as well as some consequences these manufacturers anticipate.

The AMA is arguing that these petitions will add undue burden to an already suffering industry, in addition to limiting its ability to meet the demands of both consumers and health care facilities. On the opposing side, the petitioners are pushing back on many of the group’s claims as either unsubstantiated or misleading.

 Potential Consequences Of The Petition, According To The AMA  

Hospital Beds  

Amidst the current pandemic, the AMA see this petition as a blow for businesses, many of which are already struggling. Even more, the organization also believes a ruling in favor of the petitioners could make it harder for hospitals to get the supplies they need and for the companies that make up the AMA to deliver those crucial supplies.

Ashley Furniture VP of International Sourcing Operations and Regulatory Affairs Brian Adams stated, “The coronavirus is battering the U.S. economy and endangering American jobs. Now my industry is fighting a new battle against an antidumping case targeting seven countries that make up a small, but critical 22 percent of the U.S. mattresses market. It’s disheartening that these corporations are actively working to limit incoming mattresses that are so crucial to fighting COVID-19 and saving lives.”

The organization claims that, if this ITC case reaches the preliminary hearing on April 21, it will end U.S. importers’ ability to supply mattresses to help throughout the pandemic.

Job Loss - Both US And Abroad

The AMA also estimates that a minimum of 12,000 U.S. jobs would be lost if the ITC antidumping case rules in favor of the petitioners. The group is also seeking to recast the way manufacturers abroad are viewed. According to the AMA, when it comes to manufacturers in the targeted countries, most have been making mattresses for decades with no ties to China. This petition could destroy hard-working, family-owned production facilities abroad. After the antidumping ruling against China in 2019, there was still unmet demand for mattresses in the U.S. Companies in countries targeted by the latest petition were able to meet that demand.

Inflated Data  

Finally, the AMA takes the position that the petitioners are inflating the numbers on imported mattresses. Petitioners have used statistics that cite a 52,000% increase in imports as proof that dumping is occurring. However, according to the AMA, aggregate mattress imports from all countries listed in the petition have increased by only 2.5% from 2018 to 2019—which AMA members attribute to a growing economy and the rise of online mattress shopping.

“The reason the mattress companies—Brooklyn Bedding, Corsicana Mattresses, Elite Comfort Solutions, FXI Inc., Kolcraft Enterprises Inc., Leggett & Platt Incorporated and others—want outrageous duties put on these mattresses is so they can limit the competition. They want to make big mark ups and gouge U.S. customers by charging too much for a mattress. Free trade makes the world better. Give customers better prices and raise the standard of living for people around the world,” said Jake Jabs, president and CEO of American Furniture Warehouse.

The AMA explains, “We believe the petitioners think they have already won. They’re wrong. We believe the petitioners thought they could slip past us as we fight through a global crisis. We caught them. We believe the petitioners thought we would not fight back. We will.”

The Petitioners’ Point Of View

Defending  their move to file the petition in the end of March, many of the petitioners have spoken up individually and as a whole following the claims made by the American Mattress Alliance. They’ve responded to each allegation from the AMA individually in this release.

First, they argue that there is no shortage of mattresses available to the U.S. healthcare system or other organizations responding to COVID-19. American mattress manufacturers that employ American workers can collectively manufacture and deliver more than 400,000 mattresses a week for emergency use.

Brooklyn Bedding founder John Merwin speaks to his own company’s capabilities, “As a U.S. manufacturer, we are more than capable of providing viable solutions—including hospital beds—at this very critical time in our history. Brooklyn Bedding employees make thousands of mattresses a day at our wholly-owned factory in Phoenix, supporting the largest e-commerce sites in the nation. We can build mattresses to specification, on demand, and ship to any destination in the country. Meanwhile, the U.S.-based industry as a whole also makes over 400,000 relief mattresses weekly using U.S.-based labor forces. In addition to that capacity, many of us are constructing face masks for essential industries.”

The petitioners have also clarified the meaning of this petition. It is not intended to fully bar imports from the countries listed; it simply opens an investigation to determine whether or not internationally traded finished mattresses from the designated countries are causing material injury to the US market. The entire process will unfold over six months to a year—the consequences—if there end up being any, will not take effect right now and should not impact the ability of manufacturers to supply medical facilities with beds. In fact, the estimated schedule of investigations spans from the day the petition was filed through next spring.

According to the petitioners, the goal here isn’t to handicap competitors, the goal is really to level what they see as an uneven playing field. The petitioner’s council, Yohai Baisburd explains in more detail, "If illegal dumping and foreign subsidization continue, tens of thousands of American workers will be hurt. This damage will also extend beyond the mattress industry, to American suppliers and producers of textiles, innersprings, foam, clips and machinery… American mattress producers can compete with anyone on a level playing field and based on fair competition. If dumped and subsidized imports continue to enter the US, it will only further the great harm being felt by American mattress manufacturers and workers."

Finally, the petitioners remind the American Mattress Alliance that they too are suffering from the economic hardships resulting from the pandemic.

While there is truth to both sides of this argument, it remains a contentious issue across the industry and the effects of the eventual ruling will be felt by the majority of manufacturers and retailers in some way.  As the story develops, we plan to continue sharing updates. Presently, the DOC and ITC have issued revised procedures for AD/CVD proceedings. Cases are sticking to planned timelines, but neither agency is holding in-person hearings or conferences.

Read more here, here, here and here.

Learn more about the positioning of the American Mattress Alliance by visiting americanmattressalliance.org.