The United States government is cracking down on the swell of wooden cabinets, vanities, and components (otherwise known as WCV) entering American ports from Malaysia and Vietnam (via China).
Last week, the Department of Commerce upheld a preliminary ruling, confirming that WCV products entering the United States must be covered by an antidumping and countervailing duty (or AD/CVD) – with the department looking to introduce a new certification regime to ensure compliance with rulings.
It came after the Kitchen Cabinet Manufacturers Association (or the KCMA) sought clarification from the Commerce Department after it alleged that Chinese manufacturers – the world’s largest manufacturer of wooden furniture – used both countries as a trading post to circumvent antidumping and countervailing duties.
“This represents a huge victory for the domestic cabinet industry. These scope rulings ensure that Chinese-made WCV, even when processed in Malaysia and Vietnam, face the antidumping and countervailing duties designed to protect manufacturers from unfairly priced imports.”
Betsy Natz, CEO of the Kitchen Cabinet Manufacturers Association in response to the US Department of Commerce ruling on Vietnamese and Malaysian WCV imports from China.
In addition, Ms Natz said the commitment to implement a robust certification regime “guarantees strict compliance, reinforcing the victory and securing fair market conditions for US domestic cabinet producers, the American workers they employ, and the communities they support.”
The Kitchen Cabinet Manufacturers Association reported on July 10 that the Commerce Department had announced the “Final Results of KCMA’s Scope and Circumvention Petition” and that the “KCMA is thrilled to announce that the U.S. Department of Commerce is making no changes.”
“This means that Commerce continues to find the scope of the antidumping and countervailing duty orders on WCV from China covers Scenarios 1, 2, and 3 that KCMA defined.”
Why is the US cracking down on Vietnamese and Malaysian furniture?
The ruling came after the KCMA sought clarification on three different scenarios covered by the AD/CVD orders:
- Scenario 1: finished wooden doors, drawer faces, and frames produced in China are combined in Malaysia or Vietnam with wooden cabinet boxes and drawer boxes started and finished in Malaysia or Vietnam.
- Scenario 2: semifinished wooden doors, drawer faces, and frames produced in China are further processed in Malaysia or Vietnam and then combined in Malaysia with wooden cabinet boxes and drawer boxes produced in Malaysia or Vietnam.
- Scenario 3: semifinished parts of wooden cabinet and vanity doors, drawer faces, and frames (all the rails, stiles, and panels) are produced in China and are further processed in Malaysia or Vietnam and then combined with wooden cabinet boxes and drawer boxes produced in Malaysia or Vietnam.
Could Donald Trump’s Tariff Plan kickstart a new timber trade war?
Last week, Wood Central revealed that Donald Trump, Republican candidate and favourite to win back the presidency, wants to ramp up tariffs on US imports – including a universal baseline 10% tariff on all imports and a 60% tariff on all US imports from China. If met with retaliation, this could have catastrophic implications for global timber and furniture.
“The Chinese and the US forest markets are closely linked, according to a Chinese study looking at the impact of a trade war on the global supply chain of forest products. “The main forest products imported by the US from China are plywood, fiberboard, and wooden furniture, accounting for 46.68%, 33.31%, and 50.33% of US total imports.”
“On the other hand, China’s main imports of forest products are industrial roundwood, sawn wood, and waste paper, accounting for 42.93%, 42.27%, and 71.12% of the total US exports of these products,” they said, adding that “these imported products also amounted for 10.25%, 18.09%, and 46.01% of the total Chinese imports.”
- To learn more about the implications of tariffs on the global trade of timber (and furniture products), visit Wood Central’s special feature.
