He said in an interview: “We have personally been hit by hundreds of thousands of dollars.” “This is a huge blow to us.”

On May 5, the Federal Government Impose a tariff of up to 295% Imported upholstered furniture from Vietnam and China. Dodd said that there are three furniture stores on Vancouver Island, which are almost immediate to his business. The company has about 80 employees.

He recalled a customer who had recently visited a store to shop and tested a recliner that was priced at $698. He said: “If they come to my store today, it will be $2,598.” “It’s not affordable.”

After Ottawa imposed tariffs, six Canadian furniture manufacturers complained that Vietnamese and Chinese products are being dumped into Canada at uncompetitive prices.

Protectionist policy

Palliser Furniture, based in Winnipeg, was the company that initiated the process. Although the interview request was rejected, the manufacturer’s letter to the government official clarified the reason. According to government data, about 475 million Canadian dollars worth of plus sofas and chairs (affected by the new tariffs) are imported into Canada each year, most of which come from China.

Palliser said that less than 20 years ago, more than half of the products produced by Canadian manufacturers were sold in Canada. Today, this number is less than one-sixth.

According to Palliser, a large number of cheap products (mainly from China) are hurting Canadian companies. A document submitted by the company to the Canadian Border Services Agency said: “Especially the unfair competition from China has led to a large loss of job opportunities across Canada.”

Exporting goods at a price lower than their domestic sale price is called dumping, which is a controversial issue in international trade law.

Although tariffs may be popular with consumers, tariffs are one of the dumbest tools available to governments seeking fair competition.

Complaints about expensive products made in China and Vietnam have been a long-standing problem in the furniture industry. Therefore, although Dodd said he has a hint that is coming, he expects tariffs to be in the range of 10% to 20%. , Similar to the recent implementation of the United States.

He said that because some products were priced four times the list price, sales slowed down because customers were unwilling to increase prices. Although about half of the goods he arranged were purchased locally, the other half had been concealed by tariffs.

He said: “If we can’t continue to provide products to customers and provide them with goods, then we have no sales.” “We may have to reduce the scale of operations.”

The tariffs imposed so far are preliminary, which means that when the government completes its investigation into the matter later this summer, it can completely raise, lower or eliminate these tariffs. But it is clear that the government has considered dumping to be a problem.

“The Canadian Border Services Agency believes that there is evidence that [furniture] The countries of origin or export from China and Vietnam have been dumped and subsidized,” CBSA said in explaining the decision.[And] There is evidence that there are reasonable indications that such dumping and subsidies have been and are threatening to cause harm to Canadian domestic industries. “

Cascading influence

In addition to the decline in sales, Dodd is also facing the problem of a large number of customers canceling orders because the goods they want to order have not been imported, so they must pay higher prices because they have to pay tariffs. He said he has paid thousands of dollars in tariffs and must pay for items that have already been shipped to Canada.

But he tried to minimize financial losses by stopping reshipment, unless he was sure that he could sell these items at a higher price.

He said: “By the end of this year, I have cancelled nearly 35 containers of products.” “That’s $1 million in sales.”

Dodd said the industry needs to obtain mass-produced products from overseas to offset Canada’s limited production volume, but some local manufacturers disagree.

Dino Colalillo, owner of Edgewood Furniture in Woodbridge, Ontario, said he is happy that the government has finally stepped in to help manufacturers like him.

In an interview, he said: “This makes sense, maybe ten years too late.”

He said that Canada’s domestic furniture manufacturing industry is a shadow of the past, because manufacturers in China, Vietnam and other places have been flooding the market with mass-produced products, and the local government subsidized the cost.

When talking about the Canadian industry, he said: “Many places have been abandoned and closed.”

According to Statistics Canada, as of 2017, Canadians have purchased upholstered sofas and chairs made in Canada worth about 148 million Canadian dollars. Last year, this figure fell to only 115 million US dollars.

Watch | Furniture manufacturer explains how foreign products can weaken competition:

Dino Colalillo, the owner of Edgewood Furniture, said that when furniture made in China is dumped into Canada at a retail price that does not even include the cost of its raw materials, it is difficult to compete. Photo: Craig Chivers/CBC 0:40

Colalillo said that most of the manufacturers that still exist differentiate themselves by offering more customized services in fabrics and different colors because they cannot compete with mass-produced foreign products.

Speaking of tariffs, he said: “For the industry as a whole, this is a good thing.” “This has prompted retailers to try to buy more Canadian goods.”

“Finally, I appreciate the measures actually taken by the government. I just hope the government can stick to it.”

But Melissa and Sasha Leclerc, owners of Ottawa furniture boutique LD Shoppe, said they hope the government will also consider the impact on consumers and retailers, not just manufacturers.

They said that the Leclerc family worked hard to source locally. Therefore, only about 10% to 15% of the products were affected by tariffs. Most of them were very special products whose style was that they could not find domestic suppliers.

Sasha, the company’s president and creative director, said: “There are very few manufacturers in Canada that produce similar products.” “There is no real choice for domestic manufacturing.”

Looking at the LD Shoppe catalog, you can see how big this impact is. The best-selling product is the Darcy swivel chair, which retails for $1,419. But the note on the item page on the website warns customers that the current tariff on the chair is $1,351, which is almost twice the price.

Watch| The Ottawa boutique said that the tariff plan needs to be adjusted:

Melissa and Sacha Leclair, who own LD Shoppe in Ottawa, said the new tariff plan needs to be reconsidered to consider the impact on retailers and manufacturing. 0:29

The company’s chief executive, Melissa, said that having to walk through the showroom and move items away to avoid misleading customers is frustrating because “this has become an unsaleable commodity.”

Sasha said: “During the pandemic, when our stores have closed, do this to small businesses. It’s like kicking us when we go bankrupt.”

Things may change

Mark Warner, a trade lawyer at MAAW Law in Toronto, said that although tariffs of up to 295% are undoubtedly unacceptable, Canada is not like other countries when it comes to trade disputes, because there is a provision in Canadian law that allows the government to consider actual trade disputes. Implementing remedial measures is in the public interest.

“It is interesting to see whether these initial responsibilities are established first… Secondly, whether some aggrieved consumer groups decide to initiate public interest. [argument],” He says.

He said that in this case, the government may determine that it is not in the public interest during the pandemic, “forcing Canadian consumers to spend 300% more on sofas.”

Love Dodd said that if the price increase is not enough to act as a deterrent, then the tariffs will also have a potential impact on any Canadians buying furniture now.

He said: “Using products made in Canada, we are now waiting at most one year.”

“You will see a lot of half-empty shops.”