WASHINGTON — The U.S. government’s potential imposition of duties of more than 100% could put a dent in hardwood plywood imports from China, which could curtail use of this material in domestic made cabinetry, shelving and, to a lesser degree, U.S.-made furniture.
In late April, the International Trade Administration announced preliminary duties as high as 111.09% for 61 Chinese manufacturers of hardwood plywood products including hardwood and decorative plywood and certain veneered panels. Another manufacturer, Linyi Sanfortune Wood, received a preliminary duty of 9.89%.
Most of the higher duties resulted from failed attempts by the U.S. Department of Commerce to receive information from many of the Chinese factories.
The order excludes wooden furniture pieces that are fully assembled. It also excludes RTA furniture that is typically flat packed and includes components that are purchased by and assembled by the end user or consumer. Also excluded are kitchen cabinets that are fully assembled or assembled by the end user.
Panels that are imported for assembly by domestic manufacturers of cabinetry or furniture would be subject to the duties.
The preliminary duties went into effect April 25, the publication date of the notice in the Federal Register, and are designed to address allegations of unfair trade practices by Chinese producers. A group of 12 domestic producers called the Coalition for Fair Trade of Hardwood Plywood filed its petition with the government in November.
“Over the past two years, U.S. imports of hardwood plywood have increased by 35% to 40%, decimating the U.S. hardwood plywood industry and hurting American workers,” the coalition said. “Hardwood plywood products coming from China are being sold at ‘dumped prices’ well below cost, and that is hurting American jobs. … We will not stand idly by as China threatens several thousand jobs in the U.S. hardwood plywood industry, not to mention the thousands of indirect jobs across the country.”
The impact on the furniture industry could be small as it represents roughly 5% of the coalition’s market for hardwood plywood, compared to 20% when the domestic industry was still strong.
But any duties on Chinese-made boards could change some of the purchasing habits for those producers that now buy from China.
Shortly before the preliminary duties were announced, the American Alliance for Hardwood Plywood, a group of small medium and large importers, distributors, manufacturers and retailers of hardwood plywood, criticized the move.
“The federal government has tied one arm behind the backs of the U.S. cabinet makers and other manufacturing industries by denying them a level playing field in raw material sourcing with their offshore competitors,” said AAHP Chairman Greg Simon. “This case is presented as cracking down on Chinese trade ‘cheating’ and protecting American jobs, but it will benefit nobody in the U.S.
“The cabinet industry, flooring, recreational vehicle and furniture industries use the Chinese plywood for different purposes than the U.S. plywood. The petitioners’ dreams that they will enjoy sales increases are a fantasy, even with these high duties. … In these trade cases, nobody wins.”
Those who wish to request a hearing related to case, must submit a request to the Assistant Secretary for Enforcement and Compliance at the DOC within 30 days after the April 25 publication date of the Federal Register notice. These comments, along with further information that is part of the ongoing investigation, will determine whether or not the DOC assigns final duties on the imports.
AAHP’s Simon said the group will “keep fighting the petitioners’ misguided claims, which have even less merit than they did in 2012,” in reference to a prior petition effort.
“While the DOC announcement of duties will gain headlines for the petitioners, ultimately, they will mean nothing when the ITC throws this case out.”