Tue Feb 8 2011 - USITC Preliminary Investigation: Chinese Wood Imports Hurting U.S. Manufacturers
Your source of engineered wood flooring may be changing due to a recent United States International Trade Commission (USITC) preliminary investigation ruling stating that there is a reasonable indication that the U.S. wood flooring industry has been materially injured from imports of multilayered wood flooring products from China.
The products were allegedly subsidized and sold in the U.S. market at less than fair value. Bamboo and cork flooring products are not included in the scope of the investigation. The finding, released on Dec. 3, 2010, was the result of a unanimous decision by all six commissioners.
The investigation follows a petition filed in late October 2010 by the Coalition for American Hardwood Parity (CAHP), an association of U.S. engineered wood manufacturers. Members of the CAHP include: Anderson Hardwood Floors, Award Hardwood Floors, Baker’s Creek Wood Floors Inc., From the Forest, Howell Hardwood Flooring, Mannington Mills, Nydree Flooring, and Shaw Industries Group. According to CAHP, the estimated dumping margin averages 237 percent.
The next step in the review process will be handled by the U.S. Department of Commerce with its countervailing and antidumping duty investigations on these wood flooring products from China. To be reviewed are the pricing practices by the Chinese manufacturers and exporters as well as subsidies. The Commerce Department’s investigation can result in the imposition of a duty escrow requirement in early 2011, and the subsequent assessment of actual duties to compensate for the level of unfair trading. The preliminary countervailing duty determination is expected to be released on or about Jan. 14, 2011, with the preliminary antidumping duty determination to follow on or about March 30, 2011.
According to Jeff Levin, CAHP counsel, “We feel that this is an important step toward reintroducing competitive parity in the U.S. marketplace so that this U.S. manufacturing industry has an opportunity to compete on a fair and level playing field against imports from China.”
According to Levin, the rapid growth in market share captured by manufactures in China has been achieved through unfair trade practices that have resulted in systematic underselling of domestically manufactured multilayered wood flooring and has been a direct cause of the declining competitive position of the U.S. industry in recent years.
“Even more ominous than the harm suffered by the U.S. industry in recent years is the fact that these unfair trade practices present a fundamental, if not insurmountable, obstacle to the domestic industry’s ability to recover its competitive footing, even when underlying economic conditions in this country turn more favorable,” said Levin.
Evidence presented to the USITC indicates that imports of multilayered wood flooring from China have increased dramatically over the past several years and may account for nearly 50 percent of the U.S. market.
According to the USITC, the U.S. engineered wood flooring manufacturers totaled 13 in 2009 and operated plants in Alabama, Florida, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin while employing 2,077.
Piet Dossche, president of USFloors said, “Countries of origin might change and products will be replaced, but imports will always be part of our industry’s product offering as they provide an answer to what the consumer needs in terms of quality, innovation and value.” Look for prices of Chinese engineered wood flooring products to increase in the near future with the added duties becoming a reality. The higher prices will create, a new, more profitable pricing structure for all members of the supply chain including manufacturer, distributor and retailer. Visit our website: www.ntlfloortrends.com for updates on this important story.
Editorial Comment by Jeff Golden, editor
Jeff welcomes your comments. He can be reached via e-mail at GoldenJ@bnpmedia.com
or you can write him in care of NFT.