The United States has imposed a 10% tariff on US$200 billion of Chinese goods since September 24, and will increase the tariff to 25% by the end of 2018. Mattresses have not been spared in the list of products subject to additional tariffs of 200 billion yuan.
To make matters worse, according to the official website of the United States International Trade Commission, on September 18, 2018, American domestic companies Corsicana Mattress Company, Elite Comfort Solutions, Future Foam Inc., FXI, Inc., Innocor, Inc. , KolcraftEnterprises Inc., Leggett & Platt, Incorporated, SertaSimmons Bedding, LLC and Tempur Sealy International, Inc. submitted an application for anti-dumping investigation of Chinese mattresses to the U.S. Department of Commerce and the U.S. International Trade Commission (USITC). At present, the US International Trade Commission’s industrial injury investigation procedure has started, and the US Department of Commerce will decide whether to file a case within 20 days.
The US market, which occupies 40% of China’s mattress exports, will face great challenges.
In 2017, China sold a total of 66.25 million mattresses, and exports to the United States accounted for about 6.5% of the total. According to U.S. government data, in 2017, imported mattresses accounted for 15% of the U.S. mattress market value, up from 9% in 2016. The main import sources are China, Mexico, Canada and the United Kingdom. Among them, the value of mattresses exported from China to the United States increased by nearly 159% year-on-year, reaching more than 400 million US dollars, accounting for nearly 80% of the total mattress imports from the United States, and the number was about 4.335 million. Followed by Mexico, the number is more than 1 million. The total number of mattresses imported from Canada and the United Kingdom to the United States is only about 10,000, but the average price is relatively high.
Chinese mattresses enter the US market with the advantage of low prices. The retail price of mattresses from China in the US is two-thirds lower than that of mattresses produced in the US. Therefore, after the tariffs are imposed, Chinese companies may reduce their profits and continue to export mattresses to the United States. However, it is still unclear how much impact the subsequent anti-dumping investigations will have on Chinese mattresses.
Then, from the mattress to the upstream TDI, how much impact will it have? Let’s assume that all mattresses exported to the United States are polyurethane foam mattresses. Looking at the trade war and anti-dumping from the perspective of mattresses, what can TDI do the greatest impact. According to the unit consumption standard of processing trade, due to the different density of flexible polyurethane foam, the consumption of TDI per kilogram of flexible polyurethane foam is 0.3-0.4 kg. In 2017, the number of mattresses exported to the United States was 4.335 million, and the total consumption of TDI was about 34,000-42,000 tons. According to the statistics of Tiantian Chemical Network, in 2017, China’s consumption of TDI totaled 727,000 tons. Mat’s TDI accounts for 4.7-5.8%. Since the spring mattress still accounts for a large proportion of export mattresses, and even if the spring mattress is filled with sponge, the application volume is relatively small. Therefore, it is reasonable to estimate that in 2017, TDI used to produce mattresses exported to the United States accounted for /” target=_blank>TDI consumption should be less than 4%. If mattress manufacturers compress profits, bear additional tariffs and continue to export to the United States, they will inevitably expect the price of upstream raw materials TDI to drop. In the short term, it may bring down the price of TDI. However, due to the small proportion, in the long run, mattresses will not have much impact on TDI in the trade war.
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