Dumping is an international trade practice that involves selling a product to a foreign buyer at a price that is lower than available in the seller's home market. The goal of dumping is to gain an advantage in the foreign marketplace and maintain a competitive advantage through the low price. Over the last several years, China has been flooding the U.S. market with incredibly inexpensive mattresses priced as low as $18 to gain market share. With brand names like MLily and Linenspa, these mattresses were made available through Walmart, Amazon, and Wayfair. During this time, U.S. mattress retailer, Mattress Firm (the nation's largest mattress retailer), closed hundreds of stores and filed for Chapter 11 bankruptcy protection.
There is significant conflict between American mattress manufacturers, like Tempur Sealy, and their channels of distribution which include Amazon and Wayfair (who also sell the Chinese dumped mattresses). Tempur Sealy says they will continue to use these distribution channels, but the dumping significantly complicates the relationships. The United States International Trade Commission (USITC) is investigating and estimates that the 5 million mattresses imported into the U.S. is equal to roughly one-third of total U.S. mattress production. The USITC is attempting to impose tariffs on Chinese mattresses that would be as high as 1,700 percent. That would cause an $18 mattress at wholesale to cost more than $300 and make them much less competitive in the market. The average price of a Chinese mattress in the first half of 2019 was $153 versus $280 for a similar U.S. produced mattress. Recently, USITC voted to impose anti-dumping duties on Chinese mattress manufacturers, noting material injury from the exportation of inexpensive mattresses. Chinese companies who cooperated with the USITC investigators could be subject to duties from 57 percent to 192 percent, and the companies that did not cooperate will experience duties as high as 1,731 percent. Officials fear that Chinese companies will transfer production to other countries to get around the duties. The parent company of MLily mattress brand announced plans for a $45 million plant in South Carolina to produce memory foam mattresses. If this were to occur, the USITC would pursue penalties.