Coalition Says Chinese Cos. Altering Plywood To Evade Duties

February 16, 2018

Law360 (February 16, 2018, 5:17 PM EST) — A coalition of U.S. producers of hardwood plywood asked the U.S. Department of Commerce on Thursday to find that Chinese producers of the merchandise are skirting the anti-dumping and countervailing duties the agency recently imposed, saying the companies have been slightly altering the goods to avoid the tariffs.

The Coalition for Fair Trade of Hardwood Plywood — which includes Columbia Forest Products, Commonwealth Plywood Inc., States Industries Inc. and Timber Products Co. — said in its filing that Chinese producers and exporters of certain hardwood plywood products that were hit with an anti-dumping margin of 183.36 percent and countervailing duties ranging from 22.98 to 194.90 percent in January have been altering the goods in minor ways to circumvent the duties.

Specifically, the coalition said the Chinese companies have been replacing face and back veneers made of hardwood with those made of softwood and have added softwood face and back veneers to hardwood cores of the plywood.

“Regardless of the method of alteration, softwood-faced plywood is subject merchandise that has undergone minor alterations to circumvent the orders,” the petition states.

On Jan. 4, Commerce imposed countervailing duties of 194.90 percent on Shandong Dongfang Bayley Wood Co. Ltd. and companies that were subject to the adverse facts available rate, and also imposed anti-dumping duties of 22.98 percent on Linyi Sanfortune Wood Co. Ltd. and all other Chinese companies.

Commerce announced in November that it was finalizing a pair of preliminary determinations handed down earlier in 2017 after finding that Chinese hardwood plywood had been illegally subsidized in Beijing and sold at unfairly low prices on the U.S. market.

That decision came just more than four years after the coalition fell short in its bid to impose new tariffs on the merchandise. During that case, the coalition successfully convinced Commerce to call for the tariffs, but the U.S. International Trade Commission ruled that the imports were not threatening U.S. production, stopping the case in its tracks.

“Before the orders were issued, Chinese producers began to preemptively circumvent the anticipated orders by taking merchandise fully covered by the scope and making minor alterations in an attempt to remove products from the coverage of the scope to avoid duties,” Timothy Brightbill, an attorney representing the coalition, said in a statement Thursday about the current petition. “Such blatant attempts to evade the orders are depriving the domestic industry of the full extent of the trade relief it deserves. We ask the Department of Commerce to quickly initiate an inquiry and put an end to these attempts to continue to push unfairly traded hardwood plywood products into the U.S. market by circumventing the trade orders.”

An attorney for the Chinese respondents did not respond to a request for comment on Friday.

The coalition is represented by Timothy C. Brightbill of Wiley Rein LLP.

The Chinese respondents are represented by Gregory S. Menegaz of deKiefer and Horgan PLLC, among others.

The case is Certain Hardwood Plywood Products From the People’s Republic of China, investigation numbers A-570-051 and C-570-052, in the U.S. Department of Commerce.