Leggett & Platt, an American innerspring manufacturer, has been busy lobbying the Department of Commerce. The fruit of their labor: a tariff of anywhere from 164.75% to 234.51% on innersprings from China, their biggest competition.
This tariff means that you can expect to pay double for your next mattress.
Because innersprings are the most expensive part of traditional
mattresses and the tariff has effectively removed affordable, low-priced
mattresses from the market.
This is the result of a petition to the International Trade Commission
filed in December of 2007 by Leggett & Platt—a Fortune 500 company
based in Carthage, Missouri. The petition started an investigation into
alleged “dumping” by several Chinese spring makers.
For those not
familiar with the doublespeak of trade policy, “dumping” refers to the
act of shipping large amounts of a product into a foreign market at well
below current market prices. This seems like a good thing for mattress
makers as well as consumers who buy mattresses. Others disagree,
namely Leggett & Platt.
The folks at Leggett & Platt argue
that laws like these are necessary to protect American manufacturers
(namely themselves) from unfair competition from abroad. But, rather
than protecting American businesses, this policy is killing them.
mattress makers—think obnoxious ads on your local televisions
stations—add padding, memory foams, lovely flower print coverings and
other components to innersprings to make a finished mattress. These
small to medium sized businesses are paying a steep price for Leggett’s
Leggett was already responsible for 70 to 80 percent
of the domestic innersprings market. Without foreign competition, they
now have a virtual monopoly on the market. In short, mattress makers
are now forced to buy from Leggett at any price they set.
means many mattress makers have discontinued discount mattress lines.
Almost all have had to raise their prices in order to pay for Leggett’s
Many small mattress makers relied on foreign
sources of innersprings in order to compete with their larger
competitors. This new tariff means that’s no longer an option, so many
small mattress makers maybe forced to close their doors.
with a dark sense of humor may chuckle at the regulatory underpinnings
of this tariff. The DOC has the authority to investigate dumping and
enact such anti-dumping tariffs under Title VII of the Tariff Act of
1930, otherwise known as the Smoot-Hawley Tariff Act. Under
Smoot-Hawley, exports and imports plunged by over 50 percent, from their
high in 1929 to the depressed levels of 1932. Most economists agree
that this policy was one of the major catalysts that led to the start of
the Great Depression.
Smoot-Hawley has, thankfully, been reformed
several times in the decades since those dark days. But, thanks to
companies like Leggett & Platt, who manipulate trade policy to avoid
competition, Smott-Hawley is being put back together piece by piece.
But don’t lose any sleep over it; after all, you paid so much for that mattress.
Full disclosure: The author worked for Leggett & Platt as a shipping clerk for a summer in college . It was a great job.