“You pay for peace,” said Yen.
David Cai, manager of the Dongguan Huada Furniture Co., likens the process to a shakedown: “It is like the mafia: You buy protection.” He, too, has slashed bedroom furniture exports to the United States.
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How much gets paid in “settlements” each year depends on negotiations with Washington lawyer Joseph Dorn, who represents American furniture makers who first petitioned for the anti-dumping tariffs. Dorn said, “It is wrong for Chinese companies to criticize” the practice, as they “came up with the idea” and “voluntarily agreed” to pay.
The ruin caused to U.S. furniture manufacturing by a tsunami of Chinese goods is beyond dispute. Since the 1990s, hundreds of factories in North Carolina, Virginia and other furniture centers have closed as production moved offshore, often to Dongguan. In 1992, U.S. furniture imports from China totaled $129 million, according to Census Bureau data. By 2003, they had ballooned to $5.28 billion — an increase of nearly 4,000 percent. That was when a small group of American manufacturers banded together to try and stop at least some of the rot.
They formed the American Furniture Manufacturers Committee for Legal Trade and, warning of dire consequences to “our way of life, our culture and the competitiveness of American in the world,” begged Washington to throw them a lifeline. Along with labor unions, they filed a petition that accused their Chinese rivals of “dumping” bedroom furniture on the U.S. market.
After lengthy debate, the Commerce Department ruled that China had sold beds and related items “at less than fair value” and “materially injured” American producers. To level the playing field, it imposed duties on Chinese exporters, a modest 7 percent for most but much higher for a few companies.
In Dongguan, furniture makers held a meeting in a hotel to decide how to respond. Most were from Taiwan and, unlike local Chinese businessmen, didn’t have close ties to the Chinese state. Furious at being accused of benefiting unfairly from China’s Communist Party-dominated system, they set up a fund to support lobbying efforts in Washington and started hiring lawyers.
Yen had another idea. “I told them I would set up a factory in Vietnam,” he said.
That, he explained, would shield his business not only from U.S. tariffs but also from the rising costs of manufacturing in China, where wages, electricity and other costs have all gone up steadily.
Today, Yen still makes furniture not covered by tariffs in Dongguan but has moved nearly all his bedroom production out of China. His Dongguan factory has cut its workforce from 3,000 to about 1,200. His factory outside Ho Chi Minh City, formerly Saigon, which didn’t exist when the Commerce Department imposed duties, now employs 2,800 Vietnamese.
Supporters of the tariffs — extended in December for a further five years — acknowledged at hearings by the U.S. International Trade Commission last fall that jobs haven’t returned to America but argued that the domestic furniture industry would be worse off without the anti-dumping campaign.
“There would be nobody here today if we had not done this,” said John Bassett, chairman of Vaughan-Bassett, a Virginia company that has been in the vanguard of the drive to slow imports from China. “We turned a stampede. No, we didn’t bring it to a screeching halt, but we turned it, and we slowed it down.”
The stampede from Vietnam, meanwhile, has only gathered pace. Thanks largely to transplants from Dongguan and elsewhere, Vietnam has now replaced China as the biggest source of wooden bedroom furniture sold in America.
Travis Belle, an American buyer who moved from Virginia to Dongguan at the height of China’s now fading furniture export boom, scoffed at claims that the anti-dumping cause has helped America’s own industry. “The only thing that has changed is where you have your dinner at night,” he said. “Before it was Dongguan, but now it is Ho Chi Minh City.”
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