A recent blog I wrote addressed the on and off debate - mostly fueled by fearful Vietnamese manufacturers - about whether Vietnam would be the next target for antidumping duties. As we've reported on many occasions, Vietnam has captured the majority of China's wooden bedroom business due to duties the U.S. government has placed on China in the category.

Vietnamese bedroom producers often fret about the likelihood of duties being placed on them. But a reader who responded to the blog, Kevin Lu of RK Resources in Vietnam, raised some points on why it's not very likely to happen.

1. The economies of scale are not even comparable. China, for example shipped $13.7 billion in furniture to the U.S. last year. Vietnam shipped $3.1 billion in furniture during the same year. Thus, it would not likely even come across the government’s radar.

2. He also said that in Vietnam, “you have to pay the employee every penny he deserves – not so in China before 2010.” This seems to indicate that Vietnam, while it has lower labor costs than China, pays workers what the market will bear. These rising costs ultimately will also affect product pricing, placing their costs of finished goods more in line with other exporters.

3. “Local rubberwood is the major species (in Vietnam) and can be acquired in large amounts,” he noted, adding that China has to import or illegally fetch from the saw mill.”

How this last point affects the issue of antidumping duties in Vietnam is unclear. What is clear is that Vietnam’s bedroom business has indeed grown while China’s continues to shrink. Wooden bedroom exports from Vietnam to the U.S. totaled $923.6 million in 2015, up 15% from $805.6 million in 2014. By comparison, China shipped $213.3 million, down 2% from $218.5 million during the same period.

Still, I agree that it’s unlikely duties will be placed on Vietnam. Here are some reasons why:

1. Vietnam hasn’t seemed to be on the radar of domestic manufacturers in the U.S. Nor do those manufacturers appear to have any desire to repeat the controversy of the last antidumping debate 12 years ago.

2. The domestic wood bedroom industry is smaller than it was 10 years ago. Some producers have shut down entirely, while others have shifted to imports. This would make it difficult to show the International Trade Commission that the domestic producers represent a large enough portion of the furniture industry to warrant an investigation.

3. Amish manufacturers of solid wood furniture have filled the void left by some case goods manufacturers that have closed. But while they feel the pressure of low-priced imports, many Asian producers – Vietnamese or otherwise – don’t even offer solid wood furniture. In some ways this gives the Amish a distinct advantage in the marketplace.

4. Unlike the early 2000s when imports where highly popular, domestic wood furniture producers have the support of many retailers who like the idea of having a Made in America story on their floors. With that support, many domestic producers feel like they are on more stable ground and thus wouldn’t want to make waves with those or any other potential customers.

5. The original antidumping case did what it set out to accomplish. It severely wounded the bedroom business of a major Asian competitor selling at unfairly low prices. And while much of that business has gone to Vietnam, the original supporters of the duties are pleased to see China’s demise in wooden bedroom. Thus much of their emphasis moving forward – including this year’s five-year sunset review – will be to continue the duties on China so that business doesn’t reemerge as a threat.

(Source: furnituretoday.com  Source: Thomas Russell)