Law360: US Poised To Slap New Tariffs On Chinese Plywood Imports

November 14, 2017

The U.S. Department of Commerce inched closer to imposing new tariffs on Chinese hardwood plywood late Monday, finding that the merchandise had been illegally subsidized in Beijing and sold at unfairly low prices in the United States — handing a victory to a coalition of U.S. producers that has long pressed for a crackdown on its Chinese competitors.

Finalizing a pair of preliminary determinations handed down earlier this year, Commerce’s International Trade Administration teed up anti-dumping duties topping out 183.36 percent and countervailing duties ranging up to 194.9 percent on the Chinese wood.

“The dumping and unfair government subsidization of products is something this administration takes very seriously,” Commerce Secretary Wilbur Ross said. “While the United States is committed to free, fair and reciprocal trade with all countries, this is not our idea of a properly functioning trade relationship.”

Commerce’s decision came just over four years after the Coalition for Fair Trade of Hardwood Plywood 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.

The new case will now move once again to the ITC. Wiley Rein LLP partner Timothy Brightbill, who represents the coalition, struck an optimistic tone about his client’s chances before the commissioners this time around.

“We are extremely pleased with these results, which reflect the level of China’s dumping and subsidies that U.S. hardwood plywood producers have been forced to deal with for years,” Brightbill said. “We remain focused on an affirmative injury determination at the U.S. International Trade Commission, and we look forward to securing the long-term trade relief that is so needed by this industry and its thousands of workers.”

If greenlit by the ITC, the tariffs released Monday will likely offer a good bit of relief for the coalition. In the anti-dumping prong of the case, Commerce assigned a 183.36 percent dumping duty to all Chinese shippers, including named respondents Shandong Dongfang Bayley Wood Co. Ltd. and Linyi Chengen Import and Export Co. Ltd.

On the subsidy side, Commerce handed out a 194.9 percent countervailing duty rate to Bayley Wood and a slew of other companies based on “adverse facts available,” meaning they did not sufficiently participate in the probe. Chinese producer Linyi Sanfortune Wood Co. Ltd. and all other shippers were tagged with a 22.98 percent CVD rate.

“We’re very, very disappointed with the results in both the countervail and the anti-dumping cases,” said Gregory S. Menegaz, a deKiefer and Horgan PLLC attorney representing many of the Chinese respondents.

Menegaz said that Commerce made numerous adverse inferences against his clients that were “seriously factually flawed.” Specifically, he noted that the agency is docking respondents in China CVD cases 10.54 percent for China’s export-import buyer’s credit even when there is no indication that companies actually received the credit.

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.