The United States on Wednesday said it would examine whether hardwood plywood imports completed in Vietnam using Chinese components are circumventing U.S. duties on imports from China, a move that could see similar duties on Vietnamese imports.
The U.S. Commerce Department said it was initiating the inquiries in response to requests from the Coalition for Fair Trade in Hardwood Plywood, which represents plywood makers in North Carolina and Oregon.
If the probe shows Vietnamese producers are circumventing existing anti-dumping or countervailing duties, Commerce said it would instruct U.S. Customs officials to begin collecting cash deposits on plywood from Vietnam.
The U.S. International Trade Commission in December 2017 found that hardwood plywood imports from China, which are used in wall panels, kitchen cabinets, table and desk tops and flooring, harm U.S. producers, locking in U.S. duties on the imports for five years.
The Commerce Department had imposed an anti-dumping duty of 183.6% and anti-subsidy duties ranging up to 194.9% on Chinese imports of hardwood plywood after finding they were being subsidized and dumped in U.S. markets. At the time, it said the imports from China totaled $1.12 billion.
The manufacturers' group welcomed the decision to investigate whether Chinese manufacturers were undermining the duty orders by shopping plywood and components through Vietnam.
"The level of transshipment and circumvention through Vietnam has been staggering," said Tim Brightbill, a partner at the Wiley Rein law firm and coalition counsel.
Last year, the Vietnamese government said manufacturers should use domestically-sourced raw materials to avoid incurring U.S. tariffs.
U.S. imports of hardwood plywood surged to $238 million in 2018, after the duties on Chinese imports took effect, from $28 million a year earlier, and then doubled in 2019 to $468 million, U.S. data show. Chinese imports dropped from $1.12 billion in 2017 to $143 million in 2018 and $66 million in 2019.