Things Are Looking Up for U.S. Buyers of Down as Tariff Risk Cut
(Bloomberg) -- Pillow makers in the U.S. can sleep more soundly tonight.
That’s because down feathers were excluded in the latest round of tariffs on Chinese imports, slated to be implemented next week. The news of the last-minute duty reprieve prompted cheers at the headquarters of Blue Ridge Home Fashions in Irwindale, California.
“It’s a miracle, it’s a miracle,” Ning He, the company’s chief executive officer, said in a phone interview. “It’s a big relief. It’s very encouraging that they did listen to our comments.”
He joined other companies in voicing one of the more peculiar complaints of President Donald Trump’s trade dispute with China: Manufacturers that make down pillows and comforters in the U.S. would love to buy more feathers in America, but they can’t until U.S. diners start eating more ducks and geese. Chinese consumers eat more of the meat than any country by far, helping the nation produce about 80 percent of the world’s down feathers.
“Until every American starts eating two ducks per year, we are going to need to source feathers and down in countries where people consume duck meat,” David Sweet, chairman of the American Down and Feather Council, said during hearings on the proposed tariffs. “Now, while I am a fan of duck, we don’t see this change in meat consumption happening any time in our near future.”
Their concerns echo a common complaint about the tariffs: In an effort to avoid penalizing finished consumer goods from China, the Trump administration has focused on raw materials and parts. But that means companies that manufacture goods in the U.S. with imported Chinese components will be the ones who feel the pain.
If they’d gone into effect, the new tariff on down feathers would have put Blue Ridge and its peers at a fresh disadvantage against Chinese competitors. There weren’t any proposed U.S. duties on finished pillows and blankets coming from China, just the feathers, so that added cost may have pushed retailers to instead stock their shelves with Chinese-made items.
Now that the Trump administration has removed this threat -- at least for the time being -- Blue Ridge can restart its expansion plan for a new factory in Allentown, Pennsylvania, in the home of a former steel mill. The company plans to proceed with buying more machines and hiring an additional 20 workers, Ning said.
Still, he’s still worried. Trump has threatened to put tariffs on essentially all Chinese imports in response to Chinese retaliation, and Blue Ridge not only imports feathers, but also some pillow cases and other components.
“It’s not 100 percent in the clear,” Ning said. “Hopefully, they can reach a deal.”
©2018 Bloomberg L.P.