Yet Another AD/CVD Petition Against China: Wooden Cabinets and Vanitieshttps://www.chinalawblog.com/2019/03/yet-another-ad-cvd-petition-against-china-wooden-cabinets-and-vanities.html By Adams Lee on March 7, 2019POSTED IN LITIGATION AND ARBITRATION
On March 6, 2019, The American Kitchen Cabinet Alliance, consisting of 27 United States domestic producers, (Petitioner), filed antidumping (AD) and countervailing duty (CVD) petitions against Wooden Cabinets and Vanities (“Wood Cabinets”) from China. A copy of that petition can be found here.
Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine not only that dumping or subsidization is occurring, but also that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.
Last year, domestic kitchen cabinet producers unsuccessfully argued that certain wooden cabinets were covered under the AD/CVD orders on Hardwood Plywood from China that were issued in January 2018. Because DOC rejected their scope ruling request and ruled that certain wooden cabinets were not covered by the Hardwood Plywood AD/CVD orders, the domestic producers have filed these petitions to start new AD/CVD investigations to try to get new AD/CVD orders to cover Chinese wooden cabinets.
In 2018, the total U.S. imports of wooden cabinets from China was about $4 billion.
The proposed scope definition in the petition identifies the merchandise to be covered by this AD/CVD investigation as follows:
The merchandise subject to these investigations consists of wooden cabinets and vanities that are designed for permanent installation (including floor mounted, wall mounted, ceiling hung or by attachment of plumbing), and wooden components thereof. Wooden cabinets and vanities and wooden components are made substantially of wood products, including solid wood and engineered wood products (including those made from wood particles, fibers, or other wooden materials such as plywood, strand board, block board, particle board, or fiberboard), or bamboo. Wooden cabinets and vanities consist of a cabinet box (which typically includes a top, bottom, sides, back, base blockers, ends/end panels, stretcher rails, toe kicks, and/or shelves) and may or may not include a frame, door, drawers and/or shelves. Subject merchandise includes wooden cabinets and vanities with or without wood veneers, wood, paper or other overlays, or laminates, with or without non-wood components or trim such as metal, marble, glass, plastic, or other resins, whether or not surface finished or unfinished, and whether or not assembled or completed.
Wooden cabinets and vanities are covered by the investigation whether or not they are imported attached to, or in conjunction with, faucets, metal plumbing, sinks and/or sink bowls, or countertops. If wooden cabinets or vanities are imported attached to, or in conjunction with, such merchandise, only the wooden cabinet or vanity is covered by the scope.
Subject merchandise includes the following wooden component parts of cabinets and vanities: (1) wooden cabinet and vanity frames (2) wooden cabinet and vanity boxes (which typically include a·top, bottom, sides, back, base blockers, ends/end panels, stretcher rails, toe kicks, and/or shelves), (3) wooden cabinet or vanity doors, (4) wooden cabinet or vanity drawers and drawer components (which typically include sides, backs, bottoms, and faces), (5) back panels and end panels, (6) and desks, shelves, and tables that are attached to or incorporated in the subject merchandise.
Subject merchandise includes all unassembled, assembled and/or “ready to assemble” (RTA) wooden cabinets and vanities, also commonly known as “flat packs,” except to the extent such merchandise is already covered by the scope of antidumping and countervailing duty orders on Hardwood Plywood from the People’s Republic of China. See Certain Hardwood Plywood Products from the People’s Republic of China, 83 Fed. Reg. 504 (Dep’t Commerce Jan. 4, 2018) (amended final deter. of sales at less than fair value, & antidumping duty order); Certain Hardwood Plywood Products from the People’s Republic of China, 83 Fed. Reg. 513 (Dep’t Commerce Jan. 4, 2018) (countervailing duty order). RTA wooden cabinets and vanities are defined as cabinets or vanities packaged so that at the time of importation they may include: (1) wooden components required to assemble a cabinet or vanity (including drawer faces and doors); and (2) parts (e.g., screws, washers, dowels, nails, handles, knobs, adhesive glues) required to assemble a cabinet or vanity. RTAs may enter the United States in one or in multiple packages.
Subject merchandise also includes wooden cabinets and vanities and in-scope components that have been further processed in a third country, including but not limited to one or more of the following: trimming, cutting, notching, punching, drilling, painting, staining, finishing, assembly, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope product.
Excluded from the scope of these investigations, if entered separate from a wooden cabinet or vanity are:
Aftermarket accessory items which may be added to or installed into an interior of a cabinet and which are not considered a structural or core component of a wooden cabinet or vanity. Aftermarket accessory items may be made of wood, metal, plastic, composite material, or a combination thereof that can be inserted into a cabinet and which are utilized in the function of organization/accessibility on the interior of a cabinet; and include:
Inserts or dividers which are placed into drawer boxes with the purpose of organizing or dividing the internal portion of the drawer into multiple areas for the purpose of containing smaller items such as cutlery, utensils, bathroom essentials, etc.
Round or oblong inserts that rotate internally in a cabinet for the purpose of accessibility to foodstuffs, dishware, general supplies, etc.
Carved wooden accessories including corbels and rosettes, which serve the primary purpose of decoration and personalization.
Non-wooden cabinet hardware components including metal hinges, brackets, catches, locks, drawer slides, fasteners (nails, screws, tacks, staples), handles, and knobs.
Also excluded from the scope of these investigations are:
All products covered by the scope of the antidumping duty order on Wooden Bedroom Furniture from the People’s Republic of China (Inv. No. A-570- 890). See Wooden Bedroom Furniture From the People’s Republic of China, 70 Fed. Reg. 329 (Dep’t Commerce Jan. 4, 2005) (notice of amended final deter. of sales at less than fair value & antidumping duty order).
All products covered by the scope of the antidumping and countervailing duty orders on Hardwood Plywood from the People’s Republic of China (Inv. No. A-570-051 and Inv. No. C-570-052). See Certain Hardwood Plywood Products from the People’s Republic of China, 83 Fed. Reg. 504 (Dep’t Commerce Jan. 4, 2018) (amended final deter. of sales at less than fair value, & antidumping duty order) (Certain Hardwood Plywood Products from the People’s Republic of China, 83 Fed. Reg. 513 (Dep’t Commerce Jan. 4, 2018) (countervailing duty order).
Imports of subject merchandise are classified under Harmonized Tariff Schedule of the United States (HTSUS) statistical numbers 9403.40.9060 and 9403.60.8081. The subject component parts of wooden cabinets and vanities may be entered into the United States under HTSUS statistical number 9403.90.7080. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.
Alleged AD Margins
Petitioner calculated estimated dumping margins for China that range from 175.50% to 259.99%, with an average margin of 216.04%.
Although Petitioner alleged numerous government subsidy programs that benefitted the Chinese wood cabinet industries, Petitioner did not allege a specific subsidy rates.
Named Exporters/ Producers
Petitioner included a list of companies it believes are producers and exporters of the subject merchandise. See the producer and exporter list here.
Named U.S. Importers
Petitioner included a list of companies that it believes are U.S. importers of the subject merchandise. See the named United States importers list here.
Estimated Investigation Schedule
March 6, 2019 – Petitions filed
March 26, 2019 – DOC initiates investigation
Mar 27, 2019 – ITC Staff Conference
April 20, 2019 – ITC preliminary determination
August 3, 2019 – DOC CVD preliminary determination (assuming extended deadline)
October 2, 2019 – DOC AD preliminary determination (assuming extended deadline)
February 14, 2020 – DOC final determination (extended and AD/CVD aligned)
March 30, 2020 – ITC final determination (extended)
April 6, 2020 – DOC AD/CVD orders issued (extended)
For those of you who have not been keeping track, there has been an onset of trade actions brought by U.S. companies against incoming product from China. With all the trade issues involving China and bipartisan anti-China sentiment prevalent in the United States right now, the view is that now is a great time to bring such actions. This specific case was no surprise to U.S. trade lawyers and we fully expect (many?) more to drop in the next few months. If you are importing products from China, now is the time to know the trade risks of your imports.Print:EmailTweetLikeLinkedIn
Adams Lee has more than twenty years’ experience providing strategic advice and legal guidance on complex international trade and administrative regulatory matters to US and foreign companies, trade associations, and foreign governments. He advises companies in a broad range of industries on international trade remedy and trade policy issues.