Regulation of the Furniture Industry, Domestic and Global
International, federal, state, and local regulations are frequently cited as a major bane of, and marketing benefit to, the U.S. furniture industry. They contribute heavily to costs incurred in making safe, quality products in a setting safer to workers and the environment than that of global competitors, but they also result in products with a higher pedigree, prestige, and desirability for global purchasers willing and able to pay a premium for these attributes.
Major Trade Agreements
The North American Free Trade Agreement (NAFTA) and membership in the World Trade Organization (WTO) accelerated the exposure of U.S. furniture manufacturing to global competition. Lack of significant labor regulations in these agreements compounded the dissimilarity of costs between developed and developing world competitors. In general the United States promotes open, fast, and free trade. The major exception deals with dumping issues. Antidumping duties are imposed when the Department of Commerce (DOC) determines
that the foreign merchandise is being, or is likely to be, sold in the United States at less than fair value, and the International Trade Commission determines that an industry in the United States is materially injured or threatened with material injury by reason of imports of that merchandise.1
A 2005 action against wooden bedroom furniture from China is the largest recent case of this nature, resulting in an average duty of 6.65 percent against listed offenders. The China-wide rate was 216.01 percent. By 2019 antidumping measures resulted in a duty of 227 percent against Chinese bed imports, with an overall rate increase of 25 percent since mid-2018 on goods from China.2 Innerspring mattresses from China, Vietnam, and South Africa were the target of an earlier antidumping suit, leading to penalties of 121.39 percent (South Africa), 116.31 percent (Vietnam), and 164.75 to 234.51 percent against China.3
Environmental Regulations
The Environmental Protection Agency (EPA) has significant areas of concern with furniture manufacturing and publishes a thorough booklet on its regulations that can be found at: http://www.epa.gov/compliance/resources/publications/assistance/sectors/notebooks/wdfurnsn.pdf. The National Institute of Standards and Technology (NISTIR) of the DOC publishes a “Guide to United States Furniture Compliance Requirements,” available at: https://www.cpsc.gov/s3fs-public/04.12.2016%20Guide%20to%20US%20Furniture%20Requirements.pdf. Many recent environmental issues concern flame-retardant chemicals, particularly TDCPP, which was the subject of California’s successful Proposition 65, requiring the labeling of upholstered furniture if it contains this ingredient. Agencies and Acts that govern furniture-related issues include:
- •The Consumer Product Safety Commission
- •Consumer Products Safety Act
- •National Emission Standards for Hazardous Air Pollutants
- •Flammable Fabrics Act
- •Consumer Product Safety Improvement Act of 2008
- •Federal Hazardous Substances Act
- •Environmental Protection Agency
- •The Federal Insecticide, Fungicide, and Rodenticide Act, and
- •The Toxic Substance Control Act
Regulations restrict toxics in packing material and other harmful substances in manufacturing. Formaldehyde in High Density Fiberboard is affected by California’s Air Resources Board and a 2010 federal Formaldehyde Standards for Composite Wood Products Act. The Greenhouse Gas Reporting Program affects furniture manufacturing in some cases as specified by national requirements listed on their webpage links at: http://www.epa.gov/ghgreporting/index.html.
Surface coatings on metal furniture are affected by the Coating Alternatives Guide, which recommends low-emitting alternative coating technologies that will eventually apply to wood and other furniture substances. Air toxicity standards in the workplace are also regulated, as are surface coatings through the Significant New Alternatives Policy (SNAP) Program. The EPA monitors stratospheric ozone impacts of chemicals used in processes under the Clean Air Act. This agency also publishes a helpful guide relating to furniture and wood products requirements to assist with compliance, including a hazardous waste table and FAQs.4Labeling products as using sustainable materials and procedures is generally considered attractive by both consumers and regulators, in compliance with labeling laws that require listing all materials used to create the product. The International Association of Bedding and Furniture Law Officials maintains a website, as does the Federal Trade Commission with a furniture subset.
Regulatory issues pose hot topics for furniture makers at present in the areas of flammability-retardant issues involving formaldehyde and other chemical additives, furniture tip-over, bunk bed safety, and horizontal glass standards. Provisions vary by state, in addition to more uniform federal regulations, with the large market represented by California under some of the strictest self-imposed strictures. At the federal level, the EPA began a targeted review (“full risk assessment”) in early 2013 of a set of chemicals used to meet mandated fire-retardant standards. At least seven states have enacted or are considering enacting laws banning various fire-retardant chemicals common in upholstery. The state of California is currently undecided about (or reviewing) listing bisphenol A (BPA), commonly used in wood glue resins for example, as a known carcinogen. It is commonly used as a fire retardant in outside furniture at present.
In August 2016 the U.S. EPA completed regulations for Title VI of the Toxic Substances Control Act. This authorized the EPA to enforce rules concerning the production, transportation, use, and disposal of potentially harmful chemicals. Originally drafted to lessen dangers of formaldehyde emissions from composite wood products, Title VI also limits the amount of substances manufacturers are permitted to use in plywood, medium-density fiberboard pieces, particle board, and hardwood. Related environmental protection legislation includes the California Formaldehyde Emissions Standard (CARB), the Federal Boiler Maximum Achievable Control Technology (MACT) Standard, Federal Plywood and Metal MACTs, and regulations stemming from California Proposition 65.5 These strict environmental health standards occasionally lead to controversy between industry and political interests.
Labor Issues
The rising cost of high-demand labor in China has brought attention back to the economics of domestic manufacturing and the role of workers in that calculation. Although furniture-manufacturing firms are concentrated most heavily (but not exclusively) in southern U.S. nonunion states, wages still clearly exceed those paid to furniture workers in developing countries such as China, Vietnam, and Indonesia.
Furniture manufacturing in the United States faces several labor issues flowing from the earlier downturn triggered by firm relocations outside the country. On the positive side, a sufficient supply of trained labor remains to sustain current demand for workers, but the industry is experiencing “aging in place,” with challenges on the horizon for replacing retiring employees. As its present workforce ages, with an average span of 18 years at Klaussner, nearby residents witnessing local furniture industry uncertainties since the 1990s look elsewhere for careers, and community college training programs to replace and supplement the furniture workforce see a new influx of non-native English speakers. Laid-off workers were often retrained in government programs for work in other industries. Attendees at community college programs to train furniture workers are few and often not native born, so some language difficulties have been encountered. Potential domestic workers are unsure of furniture’s future, so some remain reluctant to enter this industry in traditional employment locations. Environmental protections now in place provide an improved, healthier setting. Employees went on strike at some IKEA facilities that were considered exploitative in their labor practices, and foreign workers are likewise on track to also demand better employment practices more similar to those that are standard in the United States.
U.S. Customs
According to Chapter 94 of the Harmonized Tariff Schedule of the United States (2009), customs duties on furniture “designed to be placed on the floor or ground” are free “including seats, tables, beds, desks, and shelves of any standard material. Furniture made from endangered plants or upholstered with endangered animals is illegal and therefore prohibited, except in certain cases where special permission is obtained prior to importing.” The duty on other items (e.g., cupboards, rattan pieces) varies widely. With the exception of several countries, including Canada, mattresses made with cotton, rubber, or plastic carry a 3 percent duty or 6 percent if they involve other materials. Canada’s material-specific exclusions also apply to cotton pillows and cushions (5.3 percent) and 6 percent for other materials in the construction.6
Major national lobbying groups for the furniture industry maintain a “trade neutral” position, since some members are heavily invested in domestic production and others draw largely on foreign suppliers. An example of this is the Section 421 action recently filed by textile manufacturers that was quickly withdrawn following heavy negative reaction from a spectrum of furniture makers. The antidumping action of wooden bedroom furniture makers remains controversial, with competitors seeing “unfair advantage” seeking on both sides.