With imports of Chinese wooden furniture soaring in 2003, John Bassett III, a prominent member of a wealthy Virginia furniture family, convinced a majority of furniture makers to bring a “dumping” case against Chinese competitors for selling goods at below-market prices. The US manufacturers won and received payments of more than $US300 million from the government over the following decade. Chinese imports of wooden furniture, burdened by high tariffs, stalled.

The efforts of the 78-year-old JBIII, as he is known, were celebrated in the bestseller “Factory Man.” Actor Tom Hanks’ production company is developing a miniseries based on the book. “We were fighting for our lives,” said the charming, loquacious Mr Bassett. “I went to the front lines (of the furniture industry) and said, ‘Guys, let’s do this together.’”

But the industry remains divided whether Mr Bassett’s strenuous efforts helped very much. US wooden furniture employment continued to sink, furniture factories continue to close, and Asian furniture imports continued to climb, even though Vietnam overtook China as the top exporter to the US of wooden furniture. Some US manufacturers who imported Chinese furniture and opposed the trade case remain embittered.

“We wound up paying the tariffs,” said Alex Bernhardt Jr., chief executive of family-owned Bernhardt FurnitureCo., which closed some North Carolina factories and imported wooden furniture from China and elsewhere in Asia. “That was our money going to our competitors” in the US Bernhardt switched its domestic manufacturing to upholstered furniture, which is custom-made and is tougher for Asian factories to match.

“Antidumping remedies tend to protect parts of an industry to the detriment of other parts of an industry,” said Chad Bown, a senior fellow at the free-trade Peterson Institute for International Economics in Washington, D.C.

Mr Bassett said he had to choose between closing his factories or keep them alive by suing Chinese firms for dumping goods. In 2004, his furniture coalition won the case, and the US assessed tariffs of around 7 per cent on most Chinese importers, although several were hit with levies of 15 per cent. Over the years, that tariff margins generally increased substantially. “There are clearly subsidies that the Chinese government is providing furniture manufacturers and other manufacturers,” said the furniture industry’s lawyer, Michael Taylor.

Before the furniture case, Congress passed a law directing antidumping penalties be paid directly to domestic manufacturers instead of the Treasury. That was a big change in trade practices. Previously, domestic manufacturers had benefited from higher tariffs because they put a floor on prices, not because they received the money paid by importers.

The law, pushed by Democratic senator Robert Byrd of West Virginia and known as “the Byrd Amendment,” remained in effect from 2000 to 2007. It was repealed after the US lost a challenge to the law filed at the World Trade Organisation.

Since 2005, the approximately two dozen US furniture makers that brought the case have received $US309 million in Byrd amendment money. But the payments didn’t stem the decline of the domestic wooden furniture industry.

Stanley Furniture Co., in High Point, N.C., received the biggest payout, $US83.5 million, and says it used the money to invest heavily in a new line of domestically produced children’ furniture. But made-in-America wasn’t enough of a draw, said Stanley’s chief executive, Glenn Prillaman, who shut down the line in 2014. In 2015, Stanley’s US employment fell to 71, down from 2,600 in 2005.

“The money allowed us to fight that fight on the scale that we fought for as long as we did,” he said. But “the consumer wasn’t willing to look past short-term gains of getting something for less” and continued to prefer imports.

“We’re not sure as an industry whether a made-in-USA moniker means something,” Mr Prillaman said.

As for Mr Bassett, he says the $US54.4 million in Byrd amendment money his Vaughan-Bassett Furniture Co. received financed factory modernisation. Now, the outlook for the Galax, Va., firm “has never been brighter in 15 years,” said Mr Bassett, the firm’s chairman. In part that’s because Vaughan-Bassett is making solid woodfurniture, which is becoming increasingly trendy.

Even so, he said, Vaughan-Bassett’s employment of 560 is down by about half from 1,200 in 2005 when the company started receiving Byrd amendment money. Employment is even down from 700 workers in 2009, during the depth of the housing collapse. The new computerised machinery Vaughn-Bassett bought requires fewer workers, he said.

“We never expected to expand our employment,” said Mr Bassett. “We knew globalisation would require us and other companies to close some plants. We were trying to preserve as much of the industry as we could and we succeeded.”

(Source: Dow Jones  Author: Bob Davis)