The EU is cracking down on the sharp increase in Chinese plywood flooding ports – and will, from today, impose duties of up to 62.4% on hardwood plywood imports coming from China for at least the next six months. It comes as the commission confirmed that it was “imposing a provisional anti-dumping duty on imports of hardwood plywood from the People’s Republic of China” and, for the first time, will introduce a monitoring mechanism – designed to circumvent anti-dumping duties – that tracks the imports of modified products.
The actions come after Wood Central reported late last year that the European Commission acted on concerns of the Greenwood Consortium—a lobby representing hardwood plywood producers in Poland, Finland, France, and the Baltics—alleging that “Chinese imports are sold at artificially low prices, undercutting European producers and violating fair trade rules.”
In a statement published yesterday, the consortium said: “We welcome the commission’s decision to impose provisional anti-dumping duties, but to truly level the playing field, we call for definitive duties to be even higher than these provisional levels in the final decision later this year.”
“We also deeply appreciate the commission’s proactive approach to addressing circumvention attempts by Chinese exporters.”
According to the European Commission, consumption of hardwood plywood has slowed to a crawl, decreasing by more than 30% over the three years the investigation examined, partly because of “the end of the post-COVID-19 economic rebound.” In this context, “the quantity of hardwood plywood imported from China increased significantly in the period considered in both absolute and relative terms.”
The complaint alleged that Chinese imports contain wood from Russian forests.
Wood Central understands that the investigation, which included wooden sheets—excluding bamboo and okoumé —with a ply thickness of no more than 6 mm, classified under HS codes 4412 31, 4412 33, and 4412 34, and according to the complaint made by the Greenwood consortium—contained wood sourced from Russian forests despite the EU embargo on Russian imports.
The complaint also alleged that Chinese products are sold far below production costs, thus undercutting producers and distorting the European market. In addition, they argue that Chinese manufacturers benefit from “substantial market distortions,” including state subsidies and interventions that artificially lower production costs: “Distortions include lower prices for raw materials (such as wood), capital, labour, and energy, providing exporters with an unfair advantage,” the complaint said.
Chinese manufacturers are struggling amid rising competition.
As it stands, China is responsible for producing more than 70% of the world’s plywood, including more than 50% of plywood traded into the European common market. However, its global share of production is now in decline amid growing competition, with the United States, Morocco, Turkey, and South Korea leading the world in slapping trade sanctions on Chinese plywood imports.
“From the perspective of international trade, anti-dumping investigations often tend to trigger trade frictions and tensions,” said Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences. “The EU’s move not only concerns the interests of relevant industries within the bloc but may also impact trade relations between China and Europe,” he told the Global Times last year.
The era of EU and Chinese engagement could be over.
The crackdown comes amid growing tensions over competition between the EU and China. Last year, Wood Central revealed that China was amongst the most vocal opponents of the European Union’s deforestation regulation, whilst a 45% tariff imposed on Chinese electric vehicles was met with a retaliatory tariff by China on European whisky. Speaking to the Financial Times, Alicia García Herrero, a senior fellow at the Bruegel think tank, said the time of “engagement between China and the EU was over, as the two sides now compete in several industries.”
- To learn more about the investigation, click here for the updated documentation provided by the European Commission.
