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Politically Incorrect
July 19,
2012 by in UnCategorized 
By Home Furnishings Business in on July 2012
Bringing jobs home and made in America are themes that politicians are big on touting in the wake of the recession.
President Obama even hosted Lincolnton Furniture CEO Bruce Cochrane in the White House, praising his company for creating jobs in the United States. And while he had a nice time, from his comments at the Home Furnishings Industry Conference in May, it was clear Cochrane believed the president was playing to the electorate.
Imports have come under fire for safety and federal compliance reasons, but of late it seems a lot of folks think theyre un-Americaneven as they wear a shirt made in China or drive a car made in Korea.
And while its unlikely the furniture industry will want to put itself through another anti-dumping struggle, the governments been known to take import-limiting action on its own.
A HOSTILE CLIMATE
Were in a climate thats hostile to imports, said Erik Autor, vice president and international trade counsel for the National Retail Federation in Washington, D.C., which keeps a particular eye on products that carry high duties such as textiles, apparel and footwear. The Obama administration talks about domestic manufacturing and how its hurt by imports. Thats reflected in their stance on trade negotiations like those for the Trans-Pacific Partnership.
(Autor was referring to the multilateral free trade agreement whose purpose is to liberalize the economies of the Asia-Pacific region.)
Its not part of the Obama administrations trade policy to make it easy to import, Autor continued. To the extent folks in the administration talk about imports, its usually preceded by words like illegal and unfair.
Jerry Epperson, managing director, Mann Armistead & Epperson, Richmond, Va., noted that many retailers are keeping the import issue in front of consumers.
We have stores making a competitive statement selling American-made product, he said. Take the Amish furniture coming out of Ohio. It is a lot bigger than many of us realize. Its solid wood, its very nice and its helping fill some of those retailers slots.
He noted that Made in the USA has been a strong promotional theme for upholstery manufacturers.
For 15 years, all you could say is imports are showing gains, and now theres some divergence, Epperson said. People feel the fact that domestic manufacturing is growing is a positive sign.
ALL HAT NO CATTLE?
Despite its public stance, there might be more bark than bite in the Obama administrations position on imports.
While theres a lot of anti-import rhetoric, there hasnt been a lot of movement, Autor said. The rhetoric and the reality dont necessarily jive.
On one hand, he hasnt wrought a lot of damage, aside from the (duties on tires from China in 2009). I think he would prefer to do nothing on trade policy, because I dont believe he thinks its a political winner.
Autor called the administrations stance on negotiations such as the TPP the illusion of having a trade policy. While it hasnt taken a lot of actual anti-import action, he added that Obamas words do have an impact on the publics opinion of what is the lifeblood of many consumer-goods categories.
His rhetoric is disappointing and sets an anti-import tone, he said. It validates the popular but incorrect view that imports are just bad.
Imports actually create millions of jobs, and not just at retail. You have transportation, dockworkers and many others who depend upon trade and imports for their jobs.
He added that U.S. manufacturers often have to import components for the goods they sell overseas and that domestic producers can compete without regulating free trade.
Manufacturing wages have rolled back in this country, and labor rates have risen significantly in China, he noted. Transportation costs have further offset Chinas labor advantage.
KEEPING WATCH
Autor had been hearing rumblings of other furniture-related anti-dumping actions, but that seems to have settled down. He noted that the wood bedroom anti-dumping petition ended up with mixed results when it comes to increasing domestic products share of the U.S. market.
The really significant manufacturers in China dont pay as muchif anyduty, he said, and thereve been significant modifications to the extent of the duties through scope reviews and sunset reviews.
In his experience, Autor said trade cases are usually counter-cyclical.
When the economy turns south, you see an uptick in trade cases, but Ive been surprised at how few thereve been the past few years, he said. I think the reason is that most companiesbig or small, agricultural or manufacturingoperate in a global supply chain, so its against their interest to put big limits on importing. HFB