Okanagan retailers warn massive new tariffs on imported furniture will hit consumers hard

Click to play video: 'Consumers being warned that they will likely soon be paying a lot more for upholstered furniture' Consumers being warned that they will likely soon be paying a lot more for upholstered furniture
Consumers being warned that they will likely soon be paying a lot more for upholstered furniture – May 27, 2021

Huge tariffs have been imposed by the Canadian government on upholstered furniture imported from China and Vietnam.

The provisional tariffs went into effect on May 5 and are as high as 296 per cent on imports from China and 101 per cent from Vietnam.

“We did not expect it. No one could imagine almost 300 per cent tariffs on goods that are coming in,” said Das Kandola, co-owner and general manager of City Furniture. “This was kind of a shock to us.”

The tariffs affect upholstered seating, both fabric and leather.

“All mechanism fabric or leather sofa sets and majority of that could be chairs, sofa sets, so anything with a mechanism is affected, like a sofa bed is affected because it has a moving mechanism,” Kandola said.

Read more: Sofas, recliners from Vietnam, China under tariffs up to 300% by CBSA

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In an email to Global News, the Canada Border Services Agency (CBSA) said that “investigations into allegations of dumped and subsidized imports of upholstered domestic seating from China and Vietnam were initiated in response to a formal written complaint filed by Canadian producers of like goods.”

The statement went on to say, “Canadian producers have the legislated right, under the Special Import Measures Act (SIMA), to be protected from unfairly priced imports, including goods that have been dumped and/or subsidized.”

In many cases, imported furniture sells for a lot less than furniture manufactured in Canada

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But retailers say absorbing tariffs of that magnitude is not feasible and many are putting an immediate stop to the imports.

“We can’t afford to, so we’ve had to cancel all of our orders, future orders for the next six months to a year and look for other companies around the world to fill that gap,” Kandola said.

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The gap, Kandola said, will likely lead to furniture shortages and higher prices.

Read more: U.S. move to double tariffs on Canadian softwood lumber is ‘egregious,’ says BC Lumber Trade Council

Ray Kandola is the co-owner and president of City Furniture with 23 locations across B.C. and Alberta.

He said his company has supported Canadian manufacturers for decades but added that Canadian producers alone can’t keep up with demand.

“We like to support Canadian manufacturers 100 per cent but they can’t afford to produce that much product,” he said. “Canadian manufacturers right now are four to six months of deliveries…can you imagine how they’re going to produce now for future?”

At Treehouse Interiors, while most of the merchandise is produced in North America, some is imported from overseas.

Horner said he understand the government must act to protect Canadian manufacturers, but he’s disappointed the enormous tariffs went into effect without any notice.

“I was just shocked that the government could do something just overnight, so fast that would affect businesses this way,” Horner said. “They should just give notice…we’re going to do this effective in three or six months, whatever it is.”

He, too, had to cancel some orders because of the newly-imposed tariffs.

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“There’s a few orders that we had en route that had been ordered some time ago and when this tariff came into effect, we cancelled those orders, but not all retailers are able to do that,” Horner said.

“They will be paying three times the amount for the goods.”

He also predicted that the newly-imposed tariffs will hit consumers in the pocketbook.

“It means that the average price will be going up for the average consumer,” Horner said. “Canadian goods are generally higher quality and more money. Chinese and Vietnamese goods are generally lower cost and now the retailers won’t be ordering those lower cost versions.”

The Canadian International Trade Tribunal is investigating and will release its findings on Sept. 2.

“We’re hoping there’s a rollback to a reasonable tariff,” said Das Kandola.

“That’s what we’re looking for”

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