Piece of furniture found outside a US city (7)
I believe the answer is:
seattle
'us city' is the definition.
(city in Washington, USA)
'piece of furniture found outside a' is the wordplay.
'piece of furniture' becomes 'settle' (settle is a kind of piece of furniture).
'found outside' indicates putting letters inside.
'settle' placed around 'a' is 'SEATTLE'.
(Other definitions for seattle that I've seen before include "Place in Washington" , "Largest city in the state of Washington" , "US West coast port" , "Port of north-west USA" , "US Pacific port" .)