Unfair trade petition filed on China imports
The Coalition for Fair Trade of Hardwood Plywood (CFTHP), an association of U.S. manufacturers of hardwood and decorative plywood, announced that it has filed an unfair trade petition regarding imports of the product from China.
The petition, filed with the U.S. Department of Commerce and the U.S. International Trade Commission, asserts that imports of the product are sold in the United States at dumped prices and are subsidized by the Government of China. The association documents that through these unfair trade practices, Chinese manufacturers have gained an unfair competitive advantage.
The petition also asserts that U.S. manufacturers of hardwood and decorative plywood have suffered material competitive injury as a result of these unfair trade practices, and that the industry continues to be threatened by further injury by reason of the Chinese imports. The petition requests that the U.S. Government investigate these unfair trade practices and their harmful impact on this domestic manufacturing industry, and to apply antidumping and countervailing duties on imports of hardwood plywood from China in order to restore competitive parity in the U.S. market. The petition documents antidumping and countervailing duty margins in excess of 300 percent.
Over the last several years, the share of the U.S. hardwood plywood market captured by imports from China has grown from single or low double-digits digits to about 50 percent.
According to CFTHP counsel, Jeff Levin, the market share growth of China has not been earned on a “level playing field” as Chinese manufacturers do not feel compelled to follow the same rules as U.S. manufacturers. “China has ‘dumped’ products into the U.S. market at prices that are well below fair value,” said Levin. “Furthermore, Chinese manufacturers receive an array of government subsidies, including their access to raw materials – logs and timber – that come from suspect or illicit sources. All of these factors equate to an enormous unfair advantage for Chinese manufacturers, and injure the entire domestic hardwood plywood industry. Even more ominously, these unfair trade practices present a fundamental, if not insurmountable, obstacle to the domestic industry‟s ability to recover its competitive footing, even when underlying economic conditions in this country turn more favorable.”
In addition to U.S. manufacturers, many other U.S. companies throughout the value chain, whose competitive viability is closely tied to that of domestic hardwood plywood producers, have suffered directly or indirectly the injurious impact of the Chinese imports.
Levin explains, “Sustainably produced and quality certified American produced hardwood plywood that once earned a reasonable profit have been relegated to near-commodity status as Chinese companies ramp up production and exports to the United States, without much attention at all to quality, or environmental stewardship. Price trumps all else, so it‟s no wonder we consistently see the Chinese product undercutting the product made in the U.S.A. by 50 percent or more. Ultimately, everyone throughout U.S. commercial channels, up to and including the consumer, ultimately suffers.”
The CFTHP petition has the support of domestic hardwood plywood manufacturers that together represent about 80 percent of domestic production. In line with regulatory timelines, the CFTHP expects a preliminary ruling and escrow deposit requirement to be implemented by Spring 2013 and a final ruling and duty to be implemented by late Fall 2013.