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B.C. shoppers, retailers grapple with sticker shock amid steep furniture tariffs

Click to play video: 'Canadian tariffs causing some furniture prices to spike.' Canadian tariffs causing some furniture prices to spike.
Canadian tariffs on furniture imported from China and Vietnam are leading to price increases of 200 percent or more. Kylie Stanton reports – Jun 9, 2021

On the heels of an already tough pandemic year, B.C. furniture retailers are now grappling with the effects of steep new tariffs aimed at China and Vietnam.

“It’s been a very difficult time. People’s orders have been cancelled because we couldn’t bring them anymore at the high tariff rate,” Love Dodd, operations director for Vancouver Island-based Dodd’s Furniture and Mattress, told Global News.

“Customers are quite upset. They think about it as a tax.”

Read more: Manufacturing, retail sides of Canadian furniture industry at odds over outcome of Asian dumping

The Canada Border Services Agency implemented the tariffs May 5, in response to allegations of anti-competitive dumping by the two Asian countries.

The tariffs on China climb to over 295 per cent, while the tariffs on Vietnam reach as high as 101 per cent.

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The move has left retailers scrambling, and consumers with sticker shock.

“We had a couple come in right before the tariffs and they were looking at a recliner for $698. They came back two weeks later and it’s at $2,498. So its a huge, huge increase,” Dodd said.

Click to play video: 'Sofas, recliners from Vietnam, China under tariffs up to 300% by CBSA' Sofas, recliners from Vietnam, China under tariffs up to 300% by CBSA
Sofas, recliners from Vietnam, China under tariffs up to 300% by CBSA – May 18, 2021

Dodd said his company cancelled 35 containers, the equivalent of about $1 million in merchandise, but were stuck with a $200,000 bill for product that had already shipped to Canada.

“We couldn’t go back to our customers and say you owe us 296 per cent more because we got hit with this tariff,” he said.

“We honoured the orders we could, but we actually had to take the hit ourselves as a business.”

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In a statement, the CBSA had completed the preliminary stages of an investigation, which found imports of upholstered domestic seating form China and Vietnam had been dumped and subsidized.

The temporary duties, it said, were in place to “offset the harmful effects of the dumping and the subsidization.”

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

Retail Council of Canada President and CEO Diane Brisebois said the duties were having a “severe” impact on retailers’ ability to serve their customers.

“Our retailers don’t even have another place to get that furniture. Most of the Canadian manufacturers have been telling retailers across the country that there are delays of three, six, and nine months to get furniture,” she said.

“So it’s a double whammy for our retailers and certainly a double whammy for consumers.”

Click to play video: 'Manufacturing, retail sides of Canadian furniture industry at odds over outcome of Asian dumping' Manufacturing, retail sides of Canadian furniture industry at odds over outcome of Asian dumping
Manufacturing, retail sides of Canadian furniture industry at odds over outcome of Asian dumping – Jun 1, 2021

The council has formed a coalition of retailers to oppose the tariffs, which Brisbois called unreasonable.

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The CBSA is expected to make a decision on whether to extend the tariffs by Aug. 3.

Back in B.C., Dodd says his company is now trying to figure out what to do next, in order to stay afloat through the summer.

“It’s going to be a challenging next few months trying to figure out what direction to go in company-wise, if the duties don’t come down or don’t get taken off we don’t know what’s going to happen,” Dodd said.

“You might see a lot of furniture stores empty in the next few months.”

-With files from Kyle Benning

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