Editor's View September 2018

China Tariffs & The American Worker

 

Did you know that only 2 percent of down and feather comes from the U.S., with more than 80 percent imported from China? According to David Sweet, chair of the American Down and Feather Council—a section of the Home Fashion Products Association—the down and feather used in our industry is a food byproduct. He reveals that three ducks per person are consumed each year in China. In the U.S., that figure drops to 1/10 of a duck per person each year. So to meet demand, U.S.-based companies that create products filled with down and feather are heavily reliant on China to provide those materials.
Did you know that 80 percent of the cost of a down/feather pillow is the fill? About 40 percent of the cost of a down/feather-filled comforter is the fill. So if the U.S. government’s China 301 Tariff Proposals is enacted as is, a 25 percent tariff on bulk feather and down filling materials available domestically would be in effect. The tariff would skyrocket prices and costs would most likely be passed onto consumers.
Did you know that the tariff does not apply to pre-filled, made-in-China pillows and comforters? So products assembled by American workers in U.S.-based factories would experience significant cost increases, but fully finished products made in and imported from China would not. The cost increases would affect the financial health of U.S.-based companies that use feather and down, workers who could face layoffs and local economies where the factories are located.
In an effort to persuade the U.S. Senate to remove several subheadings from the China 301 Tariff Proposals that involve these issues, Sweet testified in early September 2018 at the U.S. Trade Representatives Public Hearing, along with approximately 400 companies and retail associations. Here are excerpts from Sweet’s testimony:
“The proposed tariffs on feather and down filling materials would hurt American factories and affect thousands of American jobs. If implemented, the proposed tariffs would only help make Chinese pillow and comforter factories more competitive with their exports to the U.S. because there are no additional tariffs being proposed on pre-filled, made-in-China pillows and comforters. Moreover, the proposed tariff would create a competitive advantage for China that did not previously exist.
“There will be nowhere to go with a cost increase of 25 percent of our key ingredient but directly to our customer, the American consumer. Retailers and hoteliers will try to avoid price increases by shifting their purchasing programs to direct imports of finished bedding products. Because China is the largest producer of feather and down, and has the machinery to make the [finished] products, it will be logical to assume the orders will go to China and not to American factories that are handicapped with this proposed tariff.
“Respectfully, the American Down and Feather Council requests that you remove the HTS codes submitted in our written testimony from all tariff lists.”
The decision on whether to amend the China 301 Tariff Proposals will be made on Tuesday, Sept. 25, 2018. We’ll keep you posted on the outcome.