Engineered Hardwood – to be or not to be affordable?

The Engineered hardwood imports from China may be subject to a new duty proposed by some US manufacturers as much as 242%! This will raise prices that all US companies pay for engineered hardwood and therefore the prices that consumers and end users pay as well. If you think hardwood floors are expensive now – just wait.

The US manufacturers claim their business is hurt by Chinese dumping of engineered hardwood flooring. If the move is successful there is a large expectation that other segments of the flooring industry including laminate, vinyl, solid wood and more will move toward anti-dumping duties as well.

Here are a couple key points that would argue against this anti-dumping policy.

Point 1.

The complaint says that China the only problem. That doesn’t mean production of engineered wood flooring would suddenly come back to the US. Why would it when other countries are already well positioned to make this same exact flooring.  Production will simply shift to Russia, Ukraine, India, Malaysia, Vietnam, Brazil, Europe etc… So the whole objective of the duty is pointless since the anti-dumping singles out one country. (that target is just a rouse)

 

Point 2.

Additionally the idea that somehow importers are buying from China and getting a giant break(saving 242%?!) as compared to buying from the United States is also false. The real complaint they want to make would be more clear if they said it like this:  If there was less competition could a US company charge a higher price, then perhaps the answer is yes. However, the US players like Shaw and Mannington have decided that protectionist governmental intervention is good for their business by reducing competition so they can try to increase their prices. Of course they will be disappointed by point 1 noted above.

 

Point 3

These companies kind of sound like Heros in a certain way. Made in the USA is a proud tradition, so who wouldn’t support that. What right thinking American could possibly argue for China and against the United States? It sounds like treason to even contemplate that. However, despite having production facilities in the USA 10 of the 12 US complainers in the filing are amongst the largest importers from China to begin with. They actually helped train, set up and support the very competition they are now complaining about. Shaw and Mannington enjoy having their cake and eating it too. If there is an advantage by buying in China they have been some the largest companies to benefit from that advantage.

 

Point 4

The notion that this is to punish Chinese manufacturers and protect American jobs is at least a noble point. The complainers would have us believe they are wrapped in the American flag and just fighting to save America. However, this disingenuous posture they take is perhaps the most corrupt of all. The actual target of this battle are US distributors and large companies who import directly rather than buying from the complainers. They have watched  as billions of dollars of flooring business have moved to other channels rather than them. In the old days they would figure out how to get better as a competitor to WIN the business. Instead they have decided that getting the government involved and wasting tax payer dollars to enrich themselves is the best policy. These US companies including distributors that consumers wouldn’t know, but larger companies like Home Depot, Lumber Liquidators, iFLOOR.com, Lowes and other companies with enough scale to buy direct and sell direct are the ones that are most likely to be hurt. Thousands of US jobs may be impacted if the US takes this protectionist policy to heart. These distributors and other direct companies have dedicated years of training, research and other resources to developing a world class supply chain. That investment is exactly what the complainers are targeting. They know that the business itself will not come back to them, but they want to interrupt the global supply chain to gain an advantage.  Gaining a competitive edge is cool with us, but doing it by whining to the government and manipulating the process is self serving and not honorable.

 

Point 5

One of the most important parts that people often forget is that the United States (and Canada) are often the largest exporters of timber to China to make the flooring to begin with! The threat of this tariff alone as caused a virtual shutdown of that business to China due to the uncertainty of the situation. Buying Red Oak, American White Oak, American Cherry, Hickory, American Walnut and more will be severally impacted short term by these companies who are pushing their own agenda.

Are there legitimate issues at stake here? Yes there are. But things like currency valuation, labor costs and other global competitive issues are not new and they should not be addressed by trying to punish US based competitors.

For those who have read the book Atlas Shrugged where a stogy old industry who could no longer compete in a free market, decided to turn instead to the government where they would pay lobbyists and politicians to seek their business fortunes this whole scenario sounds hauntingly familiar. The irony is that the companies that are complaining used to be some of the most innovative and competitive companies in the world. Today they seem more like a group of rich complainers that want what they had without working for it.

If the Levy and Duties are increased and the US companies get everything they ask for it still will not result long term with them getting the business by default. It will only move production to other countries, which will lower quality and increase prices during the turmoil. All of that change, forced by US companies will hurt US consumers most of all.

To learn more about this unfair tax on American consumers that will benefit large US companies and hurt smaller US companies goto: www.choiceandjobs.com

If you want to get involved call your congressman or senator and tell them to instruct the ITC to back off your flooring and tell the whiners to get competitive or find a new job.

More information will be posted soon at www.symo.co.

 

Made in the USA wood flooring sounds good - but is it?
Draping yourself in the American flag is wrong when your target is other US companies
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