CBSA hands down dumping margins as high as 179%

9 August 2021 Michael J. Knell

OTTAWA – The Canada Border Services Agency (CBSA) has imposed countrywide dumping margins of between 188% and 179.5%, respectively, on motion furniture and leather stationary upholstery manufactured in the People’s Republic of China (PRC) and the Socialist Republic of Vietnam and then imported into the Canadian market.

In its ruling handed down last week, the CBSA also issued separate dumping margins ranging from 9.3% to 102% for 32 manufacturers based in the PRC and 9.9% to 179.5% for eight manufacturers in Vietnam. It also determined dumping margins against three other companies who produce furniture in those countries for sale in Canada including Ashley Furniture Industries (50.3%), Restoration Hardware (136.4%) and Wendelbo Interiors A/S (49.9%).

Since last December, the CBSA has been investigating whether the production of motion furniture and leather stationary upholstery made in the PRC and Vietnam was being subsidized in contravention to the rules laid down by the World Trade Organization. It was prompted by a complaint from five Canadian upholstery producers.

In its statement, the agency noted the Canadian International Trade Tribunal (CITT) will now determine the level of injury these subsidies have done to the Canadian industry. CITT is expected to issue its order by September 2, following hearings that are expected to be held later this month. If the CITT holds determines the Canadian industry has indeed been injured by these imports, the final duties it imposes will be in place for at least five years.

It should be noted the margins issued by the CBSA may not reflect the final duties to be applied to those two product categories. Click here to see the agency’s final determination.

The new countrywide margin applied to the PRC in the CBSA’s final determination last week is lower than the 295.9% originally levied when the tariffs were first imposed this past May.

In addition to lowering the PRC’s countrywide margin rate, CBSA also calculated amount of subsidy as a percentage of export price, which in the case of almost every manufacturer from both countries was in the low single digits. If the final margins are based on those figures, the CBSA has said it will rebate duties paid at a higher rate during the investigation. They will be paid out after the CITT makes its final determination of injury to Canadian manufacturers.

The following manufacturers based in the PRC were assigned separate margins:

Anji Cozy Home Co., Ltd. – 18.4%
Anji Hengrui Furniture Co., Ltd. – 45.2%
Anji Hengyi Furniture Co., Ltd. – 15.1%
Anji UES Furniture Co., Ltd. – 17.4%
Dongguan Tianhang Furniture Co., Ltd. – 24.1%
Foshan DOB Furniture Co., Ltd. – 30.3%
Gu Jia Intelligent Household Jiaxing Co., Ltd. – 23.7%
Haining Fanmei Furniture Co., Ltd. – 53.6%
HaiNing Happy Leather Furniture Co., Ltd. – 13.4%
Haining Kendy Furniture Co., Ltd. – 102.1%
Haining Nicelink Home Furnishings Co., Ltd. – 9.3%
(Hangzhou) Huatong Industries Inc. – 55.6%
Henglin Home Furnishings Co., Ltd. – 29%
HHC Changzhou Corp. – 17.2%
HTL Furniture (China) Co., Ltd. – 48.4%
HTL Furniture (Huai An) Co., Ltd. – 25%
Jason Furniture (Hangzhou) Co., Ltd. – 33.8%
Jiaxing Motion Furniture Co., Ltd. – 36.9%
Jiaxing Vitra Electrical Technology Co., Ltd. – 21.1%
Man Wah Furniture Mfg. (Huizhou) Co., Ltd. – 31.2%
Megain Furniture (Dong Guan) Co., Ltd. – 33.1%
Natuzzi (China) Ltd. – 35.3%
Ruihao Furniture MFG Co., Ltd. – 10.4%
Shanghai Trayton Furniture Co., Ltd. – 38.9%
Trayton Furniture (Jiaxing) Co., Ltd. – 24.8%
UE Furniture Co., Ltd. – 27.7%
Vanguard Industrial JiaXing Co., Ltd. – 43.6%
Violino Furniture (Shenzhen) Ltd. – 32.3%
Zhejiang Botai Furniture Co., Ltd. – 18%
Zhejiang Chuanyang Furniture Co., Ltd. – 60.6%
Zhejiang Happy Smart Furnishings Co., Ltd. – 26.5%
Zhejiang Kuka Merlin Furniture Co., Ltd. – 24.3%

Following Vietnamese manufacturers were assigned separate margins:

Delancey Street Furniture Vietnam Co., Ltd. – 53.2%
Koda Saigon Co. Ltd. – 179.5%
Motomotion Vietnam Limited Company – 13.5%
Timberland Co., Ltd. – 14.8%
UE Furniture Vietnam Co., Ltd. – 10.4%
Vietnam Hang Phong Furniture Co. Limited – 9.9%
Wanek Furniture Co., Ltd. – 24.8%
Wendelbo SEA JSC – 17.7%

Under the Special Import Measures Act (SIMA) – the Act of Parliament governing this process – importers are required to declare their liability for provisional duties and taxes on any subject goods imported (in this case, motion furniture and leather stationary upholstery) into Canada. They are also required to inform their customs broker if they are importing goods subject to provisional duties and to ensure their proper declaration and payment of duties. Importers can go here for a self-assessment.

Data published by Innovation, Science and Economic Development Canada (formerly Industry Canada) and Statistics Canada reveals total upholstery imports from the People’s Republic of China and the Socialist Republic of Vietnam were valued at $799.8 million in 2020, accounting for approximately 56.4% of the Canadian market for residential seating.

It’s interesting to note that while imports from the PRC fell last year – attributed mainly to the impact of the COVID-19 pandemic – while those from Vietnam advanced 26%.

The CBSA’s investigation was launched last December in the wake of a complaint filed by Palliser Furniture, supported by Elran Furniture Ltd., Jaymar Furniture Corp., EQ3 Ltd. and Fornirama Inc. Although not part of the original complaint, fabric upholstery specialist Brentwood Classics has indicated to the CITT it supports the action.

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