Furniture Tariffs May Be a Mixed Blessing

Southern California’s once-booming furniture industry, a center of furniture manufacturing in the West, has been struggling in recent years against tough competition from lower-cost Chinese manufacturers.

But not all the local industry’s players will benefit from a preliminary decision by the Bush administration to impose duties on imported Chinese bedroom furniture.

The proposed duties, officially announced Friday and subject to a final ruling possibly in December, will range from 5% to 198% on wood items such as beds, dressers, armoires and desks.

By raising the costs of these products, the duties will provide some relief for many local furniture manufacturers by making their offerings more competitive.

But the region’s hub of world-class furniture and interior designers, who use Chinese manufacturers to produce their creations, will be hurt by the duties, experts said.

And higher prices on Chinese furniture could hurt retailers’ sales, possibly resulting in job losses, some retailers said.

In announcing its tariff decision Friday, the Commerce Department released statistics showing that Chinese bedroom furniture sales totaled $308 million in just the first three months of this year, compared with $358.8 million for all of 2000. This surge is due in part to government subsidies and other unfair advantages, the agency said.

Seven companies that account for about 40% of all wooden bedroom furniture shipments from China to the United States will face duties ranging from 4.9% to 24.34%, the Commerce Department said.

Eighty-two other companies will be hit with a duty of 10.92%. Those companies also account for about 40% of shipments to the United States, the agency said.

The tariffs, which take effect next week but will not be collected until the charges are formalized, will last for five years.

“The Chinese have identified certain market sectors that they are trying to dominate,” said James Jochum, assistant Commerce secretary for import administration. “Our industry is willing to compete with anyone. When they [the Chinese] do it by selling lower than their cost of production ... that’s when the Commerce Department gets involved.”

Jochum said it was too early to assess specific effects of the tariffs.

But there’s no question that surging Chinese imports have taken a toll on Western furniture manufacturers, whose biggest hub is in Los Angeles County.

The county’s 980 furniture manufacturers garner $3 billion in sales annually, slightly less than one-eighth of the industry’s $24.4 billion in nationwide revenue, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. But employment has fallen 31% since 1990, to 26,500 workers from 38,300 in 1990, according to the development group’s statistics.

Los Angeles-based Cisco Bros. Corp., one of the county’s largest furniture makers, with 220 workers and more than $20 million in sales, has been forced to automate some jobs rather than boost its workforce as much as it would like, said co-owner Francisco Pinado.

“At the end of the day, someone in China is making $40 a month,” Pinado said. “If I pay someone minimum wage, they make $40 a day. If we only did bedroom furniture, we would be hurting a lot.”

Pinado said he wasn’t expecting much help from the duties because he didn’t expect them to boost his sales significantly. Other manufacturers said the tariffs were too small to have a major effect.

But Pinado said he hoped the duties would spotlight the industry’s problems.

“I think it will help make everybody aware that there is a problem and that we need to do something about it,” said Pinado, who runs his 14-year-old company with his wife, Alba.

Kyser cautioned that tariffs would hurt some of Los Angeles County’s 471 interior design businesses.

“If you have a firm that designs and markets out of Los Angeles and whose products are built overseas, this is going to be a problem for them,” Kyser said.

Furniture importers said retailers such as Texas-based Bombay Co., which has about 50 stores in California, also would be hurt by the sanctions.

“I understand the necessity to keep jobs in America at the manufacturing end, but they may just slow down the retail sector, and a lot of those people will become unemployed,” said Charlie Nobile, who runs 26-year-old Coaster Co. of America, a Santa Fe Springs importer of furniture from China and other parts of Asia.

Times staff writer Warren Vieth in Washington contributed to this report, and Times wire services were used in compiling it.