POLITICO: Hard Times for U.S. Hardwood Plywood Producers

October 27, 2017

With housing starts and remodeling projects on the rise, it should be boom times for U.S. hardwood plywood producers. Instead, companies have been forced to cut shifts and lay off workers in the face of competition from China, industry officials testified before the U.S. International Trade Commission at a hearing Thursday.

“We should be making hay right now and our operating profits are near zero, while other people we supply to in many cases are showing significant improvements in profit,” Brad Thompson, CEO of Columbia Forest Products, told Morning Trade after the hearing. “We’ve lost market share to the Chinese. Our Chinese imports have grown 40 percent since 2013, while we have declined in volume.”

Last year, the U.S. imported more than $1.1 billion of the product from China.

Columbia Forest and a number of other U.S. producers are members of the Coalition for Fair Trade of Hardwood Plywood, which accuses its Chinese competitors of receiving massive government subsidies and dumping their hardwood plywood at unfairly low prices. The Commerce Department has already set preliminary anti-dumping and countervailing duties in the case totaling about 65 percent and is expected to make a final determination in early November.

Tim Brightbill, a partner at Wiley Rein who is representing the coalition, said the industry normally runs “three shifts a day, 24 hours a day” but has forced to cut that by half because it is operating at less than 50 percent of its production capacity. What’s worse, Thompson added, Columbia “is forecasting a general business cycle recession in 2019. When that occurs, we’ll be deep in the red.”

A number of lawmakers also testified at the hearing, which sets the stage for the ITC to vote in early December on whether to approve import relief. “The buck must stop here,” Ron Wyden, the top Democrat on the Senate Finance Committee, said as he called on the commission to put a stop to “China’s unfair trade practices.”