Is wood flooring about to get more expensive? The (U.S.) government is debating whether or not to add import duties on wood flooring imported from China. In what appears to be a lashing out by US-based wood flooring manufacturers (who else would lobby for higher-priced consumer products?), 8 domestic flooring manufacturers petitioned the Commerce Department looking to add additional duties (import taxes) on Chinese-made engineered and veneered wood flooring. The US did about $736 million in wood flooring business in 2009.
So is there cause for wanting to “level the playing field”? We’re not sure. Chinese products are already tariffed (taxed) by around 8%. How much more do you need in order to compensate for the US’ apparent inability to produce product for less, despite the fact that it doesn’t need to be shipped and all the resources are available locally. While labor is certainly cheaper in China, there is also a marketability for quality control – something that is far easier to manage and control domestically.
In either case, the final decisions should reign down around October or November.
So who does this hep, and who does it hurt? Well, let’s look at the players and what they have to say.
One firm seeking the increased import taxes is Shaw Industries, owned by Berkshire Hathaway, Warren Buffett’s giant conglomerate. Six of the companies involved already import Chinese wood flooring products, according to the Journal article, and indicate they do so because “their customers, including flooring retailers and home builders, were requiring lower-priced flooring.”
So who is this going to hurt? Consumers and builders who are looking for these low-priced solutions. They are simply going to have to pay more so these companies can make more margin. At least until production shifts to Indonesia… or Malaysia… or some other country that doesn’t suffer the increased import taxes.
And now who are we hurting?