Commerce to Consider Imposing AD/CV Duties on Vietnamese Plywood With Chinese Components
The Commerce Department will consider imposing antidumping and countervailing duties on Vietnamese plywood made from Chinese components that is allegedly circumventing AD/CV duties on hardwood plywood from China (A-570-051/C-570-052), Commerce said in a notice initiating an anti-circumvention inquiry.
The Coalition for Fair Trade in Hardwood Plywood, the domestic industry group that had originally sought the AD/CV duties on Chinese plywood, requested the inquiry. It says that imports of Chinese plywood have “decreased substantially” since AD/CV duties were initially imposed in 2017. Meanwhile, imports from Vietnam have risen more than 950% since 2015, Chinese exports of plywood to Vietnam have "effectively doubled" during that same period, and Chinese veneer exports to Vietnam are up more than 350%. Even the Vietnamese government suspects that the surge in exports of plywood products to the United States from Vietnam is a result of Chinese companies improperly seeking to avoid tariffs, the coalition said.
Commerce will apply the anti-circumvention inquiry countrywide, meaning any duties resulting from it would apply to all Vietnamese exports within its scope, rather than to individual Vietnamese exporters. Commerce will also conduct scope inquiries to determine whether the goods are actually within the scope of the AD/CV duty orders on hardwood plywood from China, regardless of any circumvention.
The inquiries will specifically cover hardwood plywood products “completed in Vietnam using plywood components (face veneer, back veneer, and/or either an assembled core or individual core veneers) manufactured in the People’s Republic of China (China), or Chinese components (assembled cores, multi-ply core panels, or individual core veneers) combined in Vietnam with other components (face and/or back veneers) manufactured in Vietnam or third countries.”
The coalition alleges that the Chinese plywood components are undergoing minor assembly and finishing in Vietnam that does not remove the merchandise from coverage of the Orders, and that the finished products are entering the United States as Vietnamese-origin plywood for the express purpose of avoiding AD/CV duties. The vast majority of the cost of the finished plywood, in terms of materials, labor, and investment, is related to the production of the Chinese components (including core veneers in particular), the coalition said.
If Commerce finds circumvention or that the goods are in-scope in its upcoming preliminary determinations, it will suspend liquidation and require AD/CV duty cash deposits on covered merchandise from Vietnam entered on or after the initiation date of these inquiries (i.e., June 17, 2020). Commerce intends to issue the final results of its anti-circumvention inquiry by April 2021.
(Federal Register 06/17/20)