Why is the Justice Department Weighing in on a Trade Case Involving Mattresses?

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It’s especially infuriating given American mattress makers efforts during the coronavirus crisis.

As states moved to address the COVID-19 pandemic, we heard about the need for personal protective equipment like face masks. In the weeks between then and now, we’ve also heard a lot about price gouging, America’s overreliance on China, and the responses some states have come up with to assure their ability to source  materials moving forward.

One thing you may not have thought about? Mattresses.

When states needed hospital beds, the domestic mattress sector stepped up to the plate. American manufacturers donated thousands of mattresses, specifically targeting areas of acute need. Some are making and delivering mattresses and beds that the health care system needs now and over the long term. Others quickly shifted production to help fill the protective mask shortage, while more still are working to repurpose their operations to make isolation gowns, privacy curtains, disinfecting wipes, filters, and other protective supplies. 

The mattress industry in the United States is proving that it has the capacity, materials and workforce to meet America’s needs. This is a positive news story that needs to be told.

Which is why I found it odd that in late April, the Department of Justice (DOJ) took a rare step of weighing in on a trade case in which U.S. mattress manufacturers are seeking punitive duties on imports they allege are being "dumped" in the U.S. at unfairly low prices.

On Thursday, the U.S. International Trade Commission (ITC) voted to proceed with the investigation of unfairly traded mattress imports from Cambodia, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam.

Domestic mattress producers in the case are seeking anti-dumping duties. They allege that imports benefit from unfair subsidies and are sold below fair market value, putting them at a disadvantage.

It was a relatively run-of-the-mill trade case until the DOJ’s Antitrust Division sent a statement of interest to the ITC claiming that “additional supplies will be needed, at least in the short term, to fill the gap and immediate need until American manufacturers can ramp up production.”

What I found strange here was that according to the International Sleep Products Association (ISPA), “none of the attorneys that signed the DOJ Statement nor any other Justice personnel have contacted their organization to discuss this subject or seek to confirm any of these assertions. Furthermore, the DOJ Statement indicates no knowledge about ISPA’s efforts to help the industry mobilize to do its part in meeting the COVID-19 challenges and make the medical community aware of the mattress industry’s eagerness and readiness to supply what is needed.”

It is important to note that at this point in time, the ITC was merely weighing whether to simply move ahead with the case, not decide judgement. DOJ’s Antitrust Division weighing in now could have influenced the ITC’s decision to take up the case. If the ITC had decided not to proceed, the Commerce Department would have been prevented from issuing a preliminary duty that could address the dumping and illegal subsidies that are the subject of this case. 

DOJ’s statement does not seem to reflect the current reality the domestic industry is experiencing. The current demand for mattresses due to stay-at-home orders has plummeted, and there is plenty of idled capacity to fulfill the needs of hospitals. 

"At minimum, with a minimum annual capacity of over 23 million mattresses, North American mattress producers collectively have the ability to make and ship at least 400,000 mattresses per week," according to ISPA. "Should additional units be needed, these companies can multiply that capacity by adding more production shifts."

Beyond contacting the domestic industry, DOJ also had the opportunity to glean some information from the ISPA’s many public statements that are in contrary to DOJ’s claims. On March 23, 2020, ISPA issued a Member Alert announcing its efforts to help link U.S. needs for hospital beds and other products that North American mattress manufacturers can produce with mattress producers’ idle capacity. 

The ISPA responded, including via three press releases to inform the medical community and state and local government decision makers that mattress manufacturers located throughout the United States were ready and willing to activate their closed manufacturing plants and do their part to supply large quantities of new mattresses on short notice. ISPA also launched a process for mattress manufacturers to indicate their capability to make mattresses and other products in response to the COVID-19 crisis.

Thankfully, DOJ appears to have made an about face and has withdrawn its comments. The Antitrust Division’s Competition Policy and Advocacy Section admitted in its filing with the ITC that the statement of interest is “not yet ripe.” DOJ declined to comment on the matter.

The U.S. manufacturers bringing this case forward mobilized quickly to aid with coronavirus relief, utilizing their hardworking and resourceful workers. As part of the response to COVID-19, these companies are producing tens of thousands of mattresses per day with the capacity for far more – in addition to a variety of other products, including PPE. They deserve a level playing field.

The case now heads to the Commerce Department, which will continue its antidumping and countervailing duty investigations. A preliminary determination is due around June 24, and antidumping duty determinations are set for Sept. 8.