US-China Trade War Expands Market For US Rug Makers

Trade & Policy

US-China Trade War Expands Market For US Rug Makers

The US government's trade and tariff debates with China, Europe and Mexico have been a big topic in the news lately. What's uncertain is how the trade war is going to play out over the short and long term. What is certain: The conversation surrounding these issues is having a positive effect on domestic rugmakers.

While labour shortage is a serious concern for many companies, they are finding a light at the end of the tunnel. "The market wanted America-made product back before this whole tariff issue started," said Brandon Culpepper, chief revenue officer of Anderson, S.C.-based Orian Rugs. "And now it's gotten even stronger. If you are making product in America, like we are, you're benefiting right now."

Culpepper said the company works with "huge retailers who are basing their buying decisions on whether a rug is made in the USA or not." Orian does produce rugs overseas, including Belgium and Turkey.

"Some of our top customers are requesting our America-made product," he added. "They know we can service them better and faster. Filling stock outages for imported product can take 90 to 120 days." That doesn't happen for domestically made rugs. "We're just never out of stock. We have looms 300 feet from where we ship, and we ship in 25 minutes."

To compete, importers are amassing product in advance of the outcome - whatever it may be - while costs are still tariff-free.

The National Retail Federation, which doesn't support the US government's tariff proposal, reported in early June that it expects imports at the nation's major retail container ports to set record numbers through the fall. Jonathan Gold, NRF vice president for supply chain and customs policy, explained: "Consumers are buying more and that means retailers are importing more.

Imports continue to be the primary source of high-quality, mass-produced necessities at affordable prices and will be for the foreseeable future. If tariffs are imposed on consumer goods, they will only drive up prices for American families while doing little or nothing to punish those responsible for unfair trade practices." Other industry trade organisations are all also weighing in.

The Home Fashion Products Association in late May issued a letter rebutting the argument for placing tariffs on Chinese textiles imports. On May 17, the National Council of Textile Organizations, a D.C.-based trade association that represents domestic textile manufacturers, testified at a hearing before the Office of the US Trade Representative in favour of such tariffs.

The US Industrial Fabrics Institute and Narrow Fabrics Institute joined the NCTO in a 24-page statement supporting the action.

The shift of home textiles manufacturing to Asia was highly disruptive, and several companies did not survive, the Home Fashion Products Association noted in its argument against the proposal.

Levying a tariff on Chinese imports would deal a hard blow to the 500 US-based home textiles companies in the business. "Increasing tariffs will lead to significantly higher prices, and inevitably, lower sales and fewer jobs," the HFPA wrote.

"Proposed tariffs, if implemented, have the potential to put many of our companies out of business, and worse still, they will not bring textile manufacturing back to this country."

Which means established domestic manufacturers of textiles, like rugs, have the advantage, they argue. Mark Ferullo, executive vice president of Natco Home's woven rug division, said the company's Sanford, Maine-based facility, which was recently expanded by 25% to 400,000 square feet, is "running at all-time highs."

To alert customers of their products' origins, he added, "We have the American flag on our labels with a picture of a Maine lighthouse."

He continued: "Factory visits with our customers allow them to experience the hard work and dedication of our caring employees. We are proud to say we produce rugs in the USA."

Scottsboro, Ala.-based Maples Rugs this year marks its 52nd anniversary as a domestic rug manufacturer. "We are experts at producing rugs domestically and leveraging all the advantages that come with that said John Maples, president. The company has seen increased interest over the past year from retailers and consumers for Made in USA.

"Retailers realise it is much simpler for them to work domestically, so that is why they're more interested in USA-made goods. We do everything faster, logistically. They can run on less inventory and change more quickly." Maples Rugs is emphasising its message with product labels that feature "a larger American flag."