EDITOR'S NOTE: The original version of this story stated Cabinetworks was contacted for a comment on this story, but that was inaccurate. That material has been removed from this story.

The Kitchen Cabinet Manufacturers Association reported that the U.S. Department of Commerce has issued a preliminary affirmative scope ruling concerning wooden cabinets, vanities, and components (WCV) from China that are being shipped through Malaysia and Vietnam to evade the antidumping and countervailing duty (AD/CVD) orders on WCV from China.

“The KCMA is pleased that Commerce has reached an affirmative decision on a critical question in these inquiries - whether the scope of the AD/CVD orders covers cabinets that consist of Chinese doors, drawer faces, and frames that have been combined with Malaysian or Vietnamese cabinet boxes and drawer boxes," said Betsy Natz, CEO of KCMA. "We look forward to working with Commerce to demonstrate that this scope also covers scenarios when semi-finished Chinese components are shipped to Malaysia and Vietnam and combined with other components in those countries.”

The KCMA provided four different scenarios (see Sidebar at end) regarding cabinet parts and products made in China and shipped through Malaysia and Vietnam with different states of processing in those countries.

According to the KCMA, the commerce department found that all scenarios were covered by the scope of the order. In the statement, the agency “reasoned that all the components and parts described in these scenarios are covered by the scope of the orders. In addition, it found that all of the further processing in the third countries of Malaysia and Vietnam are specifically covered by the orders. In so doing, it rejected arguments raised by Cabinetworks and MasterBrand that parts such as toe kicks are not covered by the plain language of the scope. It found that it was not expanding the scope of the orders in any way by making this finding. This is an important outcome of this proceeding as it is now clear that these components and component parts are covered by the scope.

MasterBrand response

In a statement, MasterBrand said that overall the ruling was a positive for the domestic cabinet industry. The company found that two of the scenarios aligned with their viewpoints and for the two others it plans to remain "engaged in the process as Commerce continues its analysis." 

Here is the MasterBrand statement in its entirety:  

"On March 16, 2023, the U.S. Department of Commerce issued its preliminary determinations in the scope inquiries involving the antidumping (AD) and countervailing duty (CVD) orders on wooden cabinets and vanities and components thereof from the People’s Republic of China. 

"MasterBrand was pleased to see Commerce’s preliminarily finding that products under Scenario One (i.e., cabinets and vanities completed in Malaysia and Vietnam using certain finished Chinese components that are explicitly included in the scope language, such as doors and frames) are covered by the scope.  This ruling is consistent with MasterBrand’s continued efforts to urge strong enforcement of the AD/CVD orders in recent years and should aid in ensuring that Chinese WCV pays the duties owed on such merchandise, to the benefit of the domestic industry.

"The Company was further pleased to see Commerce's finding that the wooden cabinets and vanities covered by Scenario Four are not covered by the scope.  This is also consistent with MasterBrand’s position.

"With regards to Scenarios Two and Three (i.e., products using only certain semifinished Chinese components that are explicitly included in the scope language, and products using only certain semi-finished parts of such components), we look forward to remaining engaged in the process as Commerce continues its analysis.

"MasterBrand believes the preliminary rulings were largely positive for the domestic cabinets manufacturing industry and continues to urge strong enforcement of AD/CVD orders and accurate interpretation of the scope language."
 

.SIDEBAR: Background on four scenarios
In our [KCMAs] requests for scope rulings, we requested that Commerce examine whether the following four scenarios are covered by the AD/CVD order:

Scenario 1: finished wooden doors, drawer faces, and frames produced in China are combined in Malaysia or Vietnam with wooden cabinet boxes and drawer boxes started and finished in Malaysia or Vietnam.
Scenario 2: semifinished wooden doors, drawer faces, and frames produced in China are further processed in Malaysia or Vietnam and then combined in Malaysia with wooden cabinet boxes and drawer boxes produced in Malaysia or Vietnam.
Scenario 3: semifinished parts of the wooden cabinet and vanity doors, drawer faces, and frames (all the rails, stiles, and panels) are produced in China and are further processed in Malaysia or Vietnam and then combined with wooden cabinet boxes and drawer boxes produced in Malaysia or Vietnam.
Scenario 4: finished wooden toe kicks produced in China are combined in Malaysia or Vietnam with all other components necessary to build a complete wooden cabinet which was started and finished in Malaysia or Vietnam.