Better sit down for this one. If you can still afford a chair, that is.
Dozens of Surrey furniture stores are taking it on the chin after the Canada Border Services Agency, which is responsible for administering the Special Import Measures Act, recently imposed withering duties on upholstered seating from China and Vietnam.
A Statement of Reasons issued by the CBSA on May 20 notes that on May 5 it did this in answer to “the dumping and subsidizing of certain upholstered domestic seating originating in or exported from” those two countries that is being sold here in Canada. As a result, there is now a 295.5 per cent on the Chinese products and 101.5 per cent on those from Vietnam.
Navjeet Deol, owner of Surrey Furniture Warehouse in Newton, says such high tariffs will mean more expensive furniture for consumers.
“We’d be OK if they put a duty of 20 per cent, 25 per cent, still it can be absorbed, right. But this 295 per cent, 296 per cent duty, I don’t know what our future will be like. Right now we are figuring out how we are going to be paying the rents,” Deol said. “It’s very concerning right now.
“I see people walking away.”
Jeet Jaswal, owner of MJM Furniture in Newton, says a tariff of 295.5 per cent is “outrageous.”
“When they imposed the tariff, they just did it on the same day they imposed it,” he said, “and they made it active the same day. We hope that it is temporary otherwise it’s going to have big consequences for Canadian shoppers. The prices are probably going to go up quite a bit, significantly, due to the tariff. We already have so many shortages of inventory in Canada and the Canadian suppliers, they don’t have adequate capacity to meet the existing needs already.
“They’re all about I would say seven to eight months for delivery already and so this is going to compound the problem even further,” Jaswal noted. “As some more inventory comes off the line with these tariffs it’s going to make it worse in there so the delivery times are going to go way up and the prices are going to go way up.
Jaswal noted a lot of Canadian businesses are hurting and for MJM it’s meant a loss of “thousands and thousands” of dollars.
“We had two or three containers on the water and we had to divert them back to China, and one to the U.S. in there, so it’s going to cost me without even receiving any merchandise it’s cost me almost like $30,000 to divert those in there and then we had to cancel a lot of orders from customers who’ve been waiting like three or four months for delivery,” he said.
Ken Hardie, Liberal MP for Fleetwood-Port Kells, explained that dumping involves exporting a product at such a low price that it will damage the domestic market, opening the door for the dumper to gain more market share.
“That’s the reason why the trade people are always looking for this sort of thing and when they find it, countervailing duties will be applied,” Hardie said. “We don’t allow that to happen because it hurts the domestic market.
“Don’t forget though, even at normal ordinary prices these things are still quite low priced compared to things that are made, say, in North America,” he said. “It’s either because they’ve got an over-supply and they want to get rid of it, or they want to come in and they want to try and take over your market.”
“I don’t know if they actually have that agenda per se, but the result is the same,” Hardie said. “There are people who make furniture here in Canada, that you know they’re employed, they pay taxes, and they do all those things, and they deserve some protection.”
Anita Huberman, CEO of the Surrey Board of Trade, said Friday hasn’t yet heard complaints from the board’s “furniture members” but noted the cost of wood is also going up.
“Of course even during the pandemic the forestry sector was facing so many issues and so anything to do with wood is going up,” she noted, “and they’re having to pass on those high expenses, now tariffs onto the consumer and of course it’s concerning because we have so many additional costs being added to the bottom line as both consumers and business owners.”