Love Dodd, owner of Dodd ?? Victoria-based Furniture said there might be good reasons for the tariffs, but enforcing them without warning and at such high levels would sting both businesses and consumers.
The price of some upholstered home furnishings will rise significantly after the Canada Border Services Agency imposed countervailing and anti-dumping duties on imports of recliners, sofas and other furniture from China and Vietnam.
The agency imposed provisional tariffs in early May ranging from 20.65% to 295.9% on some furniture shipped from China, and between 17.44% and 101.5% on some imports from of Vietnam, after determining the merits of a complaint filed by Winnipeg Furniture Maker Palliser.
Love Dodd, owner of Victoria-based Dodd’s Furniture, said there might be good reasons for the tariffs, but enforcing them without warning and at such high levels would sting both businesses and consumers. .
“With an ongoing pandemic, inflation on the rise, why do we have to put a 300 percent tariff on daily purchases? I understand if some items were made here, but that includes futons and things not made here, ”Dodd said, adding that the tariff particularly affects the affordable end of the market.
“It will definitely affect our business, but it will affect the consumer a bit more,” he said. “Someone who shows up for a $ 998 sofa will now have to be prepared to pay $ 2,500.”
The tariff does not affect imports from other countries or household furniture that the store carries.
But Dodd noted that household furniture comes at a steep price.
“This oriental thing kept [stores] gone and was ready for delivery right away, and consumers these days don’t want to wait, they want it yesterday, ”he said.
Tariffs for imports from China and Vietnam include upholstered seats with movement functions such as reclining and swivel seats, fixed leather upholstered seats, sectional seats, footrests, daybeds and futons.
In a statement Thursday outlining the reasons for the tariffs, the agency said it began investigating Dec. 21 under the Special Import Measures Act, which seeks to protect Canadian manufacturing from subsidies. on imported products, imports dumped into Canada at a price below the domestic market price. .
He noted that there were reasons to believe that the Canadian industry would be harmed and that interim tariffs were warranted.
The agency said that in addition to the original complainant, six other Canadian producers were confirmed to manufacture competing furniture, while 40 others were considered “potential producers”.
In a letter copied to Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland, Dodd said his company’s losses were already in the thousands after paying for products, which will now be subject to tariffs, to be shipped from China and Vietnam.
“Now a $ 25,000 container [of furniture] is $ 75,000 and when it gets to the port there are tariffs and freight so you’re looking at a cost of $ 100,000, ”he said in an interview.
He said the company was stuck with products it would sell at a loss because it couldn’t expect customers to pay thousands of dollars above the normal sticker price.
Dodd said small businesses like his would manage to escape without too much financial difficulty, but it could have a huge impact on chains like Leon’s and The Brick.
“They will be hit hard,” he said, estimating that their losses will likely run into the millions.
Leon’s Furniture Ltd., parent company of Leon’s and The Brick, is Canada’s largest furniture company with over 300 locations.
“Many businesses across Canada are affected and some are considering bankruptcy,” said Dodd.
Rahim Khudabux said his Max Furniture store would not feel the pinch of this tariff much, but he is concerned about the medium to long term effects.
Khudabux said it will now have to compete with more companies for supplying foreign producers and Canadian manufacturers.
“There will be a lot of emphasis on the product made in Canada and that could affect our supply chain,” he said.
Dodd said the Canadian manufacturing sector needed eight months to ship the product as is. “If everyone goes, we’ll wait a year,” he said.
Khudabux said he hopes they will be taken care of, given their track record with regular vendors. “But there will definitely be additional pressure on supply,” he said, noting that the companies he uses to access foreign markets have been in contact to let him know what’s not going to happen. “Suppliers are canceling orders, which means stores across Canada are canceling orders.”
Dodd said his store was already facing COVID-19, causing shipping delays from overseas and domestic suppliers due to a lack of shipping materials and containers without also facing the new tariffs.
The Canada Border Services Agency said its investigations into the dumping and subsidizing claims are ongoing and a final ruling is expected on August 3.
The Canadian International Trade Tribunal has initiated an inquiry into the question of injury to the Canadian industry. These results are expected on September 2.