The International Trade Commission said it voted 6-0 "that there is a reasonable indication that a US industry is materially injured or threatened with material injury by reason of imports of wooden bedroom furniture from China that is allegedly sold in the United States at less than fair value."
The decision by the ITC, a quasi-judicial agency that hears trade disputes, opened a new front in the row between the US and China after Washington imposed duties on Chinese imports including televison sets and textiles.
Stiff duties sought
The case was the latest response from the United States to concerns about a loss of jobs to China and a currency peg for the Chinese yuan that some US officials say is too low.
The ITC ruled on a petition from some 30 US manufacturers of
wood bedroom furniture, seeking duties as high as 440 per cent, claiming the artificially low prices on Chinese imports were hurting the companies.
The ruling requires the Commerce Department to start an investigation to determine an appropriate level of offsetting duties. The ITC will then hold a final hearing in mid-year and issue a final injury determination in the autumn of 2004.
"Since January of 2000, some 34,700 wood furniture workers have lost their jobs. That's 28% of the work force. The Chinese are not playing by the rules they agreed to when they joined the World Trade Organisation"
Spokesman for furniture industry
The duties "would provide tremendous relief to the industry," said Doug Bassett, spokesman for furniture industry's Committee For Legal Trade formed last year that filed the petition along with four labor unions.
"Since January of 2000, some 34,700 wood furniture workers have lost their jobs. That's 28% of the workforce."
Bassett added, "The US manufacturers are competing head-to-head against the rest of the world just fine, and we believe the rest of the world is playing by the rules. But the Chinese are not playing by the rules they agreed to abide by when they joined the World Trade Organisation."
The decision sparked an immediate reaction from US retailers, who formed their own coalition aimed at averting the tariffs.
The newly formed Furniture Retailers of America called the new trade action "ill-conceived and damaging" for the United States.
"This petition is a brazen and hypocritical attempt by some
domestic furniture companies to use the US government to manipulate the bedroom furniture market in their favour, at the expense of American consumers and independent furniture retail stores," said Mike Veitenheimer, spokesman for the retailers group.
"Claiming that the petition against China will 'save American jobs' is simply not true. Instead, the short-term price disruptions and product shortages are almost certain to adversely affect sales of bedroom furniture, leading to job losses for retail company employees."
"Claiming that the petition against China will save American
jobs is simply not true. Instead, the short-term price disruptions and product shortages are almost certain to adversely affect sales of bedroom furniture, leading to job losses for retail company employees"
Spokesman for retailers' group
Some 60 retail companies joined the coalition.
"This is one of the most cynical trade cases brought before the ITC in recent memory," said William Silverman, attorney for the retailers.
"The domestic manufacturers helped create the Chinese bedroom furniture industry years ago .... Once retailers went to China directly, thereby eliminating petitioners' middlemen profits, the group of domestic producers responded by filing this dumping case with the ITC."
The petition covers some one billion dollars worth of furniture from China, including wooden beds, headboards, night tables,
dressers, bureaus, hutches, armoires, book cases and writing