The US Department of Commerce ruled on Tuesday that penalty tariffs on Chinese furniture imports should be lowered. They have been in place as an anti-dumping measure since June of this year.

Tariffs for 115 companies, who account for roughly 65 percent of Chinese furniture imported to the US, will decrease from 12.91 to 8.64 percent.

Another seven producers, accounting for about 35 percent of imports, will incur tariffs of between 2.22 and 16.7 percent.

China supplies about half of the bedroom furniture imported to the US, trade that totaled US$1.2 billion last year.

Zheng Shijiang, deputy-general manager of Shanghai Yitai Co Ltd, said the lower tariffs would head off price pressure to some extent.

"We think we can afford the rate of about 9 percent," he said, but the company is still planning to continue shifting exports to other countries in Asia as the US market becomes less profitable.

Exported furniture sells at higher prices with the average profit as much as 30 percent.

The Chinese furniture industry remains unhappy, arguing that the ruling is unfair since Chinese furniture is reasonably priced. But costs provided by exporters are not accepted by the US as it does not recognize China as a market economy.

Having defined it as such, they calculate costs of production based on a surrogate country, where materials and labor are usually much more expensive than in China, to calculate the normal value of imports.

To be classed as a market-orientated industry there should be virtually no government involvement in production or pricing, it should have private or collective ownership that behaves in a manner consistent with market considerations and producers should pay market-determined prices for all major inputs, and for all but an insignificant proportion of minor inputs.

Jia Qingwen, director of China National Furniture Association, believes China's furniture industry is completely market orientated and will continue negotiations with the US for recognition. Around 90 percent of Chinese furniture companies are private, shareholding or foreign-funded.

The new ruling will not be finalized until the US International Trade Commission upholds that US companies are being harmed by imports of Chinese furniture. This decision is to be made by December 23.

Representatives of US retailers who had been fighting the anti-dumping duties were encouraged by the ruling.

"We see the reduced rates as positive news, and a very clear indication from the Department of Commerce that the domestic industry's problems are not the result of Chinese imports," said Mike Veitenheimer, spokesman for the Furniture Retailers of America and vice-president of the Bombay Co.

(China Daily November 11, 2004)