Downlite says USTR tariffs give Chinese manufacturers advantage
Posted June 24, 2021
MASON, Ohio – Management at Downlite Outdoor, a division of Downlite, a market leader in down and feather processing and a supplier of responsibly sourced performance fills, said the company has been unduly burdened by the current round of tariffs and these United States Trade Representative (USTR) tariffs give Chinese manufacturers a competitive advantage over American manufacturers.
Small businesses across America are struggling to survive, and COVID is only the most recent challenge, the company said.
As noted in The Wall Street Journal on June 13 in an article by Josh Zumbrun, "The Biden administration's long-awaited review of tariff policy can't come soon enough for an Ohio bedding maker, which says it is being pummeled by U.S. levies on imported Chinese feathers. The exclusions that were granted to Downlite and thousands of other U.S. companies expired by late last year, however, and the U.S. Trade Representative's Office says it won't consider granting new exclusions until it completes a top-to-bottom review of tariffs on these and other Chinese imports imposed by the Trump administration.
Meanwhile, no tariffs were ever imposed on many of the finished bedding products from China – such as down-filled comforters and quilts, mattress pads and sleeping bags – putting Downlite at a disadvantage to its Chinese competitors."
"It's basically just helping the Chinese right now while hurting U.S. manufacturing," said Josh Werthaiser, president of Down-lite's feather and down division.
One of Downlite's key raw materials was on the government “4A” list that designates the added tariffs, while Chinese-imported finished goods were on another list called 4B. The tariff list 4A was finalized and put into place on Sept. 1, 2019, while the other list 4B was never implemented. The result was the raw materials needed to make products in America by American workers, now carry higher tariffs, as they were a part of list 4A. At the same time, finished products made entirely in China and imported into the USA were “never tariffed,” as they were a part of list 4B.
This unexpected consequence continues to give China-made finished goods a clear cost advantage over USA manufactured product, putting Chinese factories to work while hurting American workers. This remains a crippling challenge to U.S. suppliers and manufacturers.
While the virus has ravaged the American economy, small businesses across America were already fighting to survive years prior. Government regulation and policy has added costs and complexity at every turn. American manufacturers were bending under this pressure prior to COVID and family businesses were especially vulnerable. Downlite is one such family business fighting for its existence.
Downlite is a family-owned USA-based manufacturer of high-quality bedding: pillows, comforters, mattress pads and more. Downlite has multiple North American factories and warehouses and a longstanding history of supporting American workers, employing over 400 employees in Ohio and North Carolina alone.
When the Trump Administration announced tariffs on Chinese imports in 2018, a new set of challenges began. The tariffs on certain raw materials (specifically on "Tariff List 3") made American-made products Less competitive than similar products made in China and imported to the USA.
In response to this policy, Downlite took part in USTR hearings to explain why these raw materials should not be burdened with a tariff, citing lack of domestic alternative supply sources, probable domestic job loss, and increased costs to the end consumer. Based on the guidance provided, the USTR removed those raw materials from a List 3.
The good news was short-lived. In mid-2019, the USTR announced "List 4," which once again included Downlite's core raw materials. Downlite returned to Washington, D.C., and made its case to the USTR. This time, the USTR decided against removal of these materials from the list. Even worse, the USTR split List 4 into two parts. List 4A included all materials coming from China, where less than 75% of the total volume imported into the United States originated from China. List 4B included all other items. Therefore, the tariff remains high for those on these lists. The USTR apparently believed this would help American manufacturers. Unfortunately, it only made things worse.
Downlite has been working diligently with the current administration and the USTR to reinstate the previously approved exclusions. Unfortunately, these tariffs remain.
Small businesses across America battle every day to survive, full of hard-working people with families depending upon them. However, misguided government policy that hurts U.S. business and employees should not be one of them.
Please write the USTR at email@example.com or the Senate and the House to express your opinion.