A federal judge has “sharply rebuked” Customs for finding “no evidence” that the swell of wooden cabinets, vanities, and components entering ports were produced in China and shipped through Malaysia specifically to circumvent Chinese duties.
The commentary, made by Judge Lisa W. Wang of the US Court of International Trade (“CIT”), comes after Kitchen Cabinet Manufacturers Association claimed that the Custom’s Office for Rulings and Regulation, subsequently, in July 2023, “in a tragic, unexpected and poorly reasoned decision,” reversed a March 2023 determination of evasion against Chinese-based Scioto Valley Woodworking (trading as Valleywood Cabinetry) through its Malaysian affiliate, Alno Industry SDN BHD (“Alno”).
Judge Wang outright rejected Customs “baseless conclusion” that no evidence existed that the Malaysian company was transshipping Chinese cabinets to the US to evade antidumping and countervailing duties.
“Customs must now revisit its flawed determination and fully account for the substantial evidence of evasion it chose to ignore,” according to the Kitchen Cabinet Manufacturers Association, who filed the complaint to the CIT on behalf of the US supply chain. “As we have consistently argued, the Customs finding of “no evidence” of evasion was absurd, and Judge Wang decisively agreed.”
“The evasion activity that is taking place remains deeply troubling,” a representative for the Kitchen Cabinet Manufacturers Association said: “Antidumping and countervailing duty orders are designed to create a fair competitive landscape for domestic producers so they can compete on a level playing field with imports, but Malaysia has become a hub for transhipment schemes involving Chinese goods subject to US duties.”
America tightens its grip on Chinese furniture via Vietnam and Malaysia
Judge Wang’s opinion comes after the US Department of Commerce – in July – upheld a ruling confirming that products coming from Malaysia and Vietnam entering the US must be covered by an antidumping and countervailing duty (or AD/CVD), with the department now looking to introduce a new certification regime to ensure compliance with rulings.
“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,” said Betsy Natz, CEO of the Kitchen Cabinet Manufacturers Association, in response to the ruling on Vietnamese and Malaysian WCV imports.
Yesterday, Wood Central revealed that Donald Trump’s trade tariffs, which would see duties on Chinese cabinets, vanities and other components jump to 60%, would add billions to the cost of wooden products sold in the United States. “A tariff of 60% on China would be a major shock to international goods markets,” the economists said, adding that after the 2018–19 China-US trade war, “62% of US imports from China are subject to an average tariff rate of 16%, far below the rate promised by Trump on the campaign trail.”
- To learn more about Donald Trump’s plans to use tariffs (and thus lift timber prices), click here for Wood Central’s special feature from earlier this month.
