WASHINGTON, D.C. – U.S. Department of Commerce has made its preliminary countervailing duty determination on Chinese imports of wooden cabinets and vanities. This is one of the largest trade cases in history filed against China at the International Trade Commission (ITC) and Dept.  of Commerce.

Dept. of Commerce preliminarily calculated the following subsidy rates: 10.97 percent for Ancientree Cabinet Co., Ltd., 16.49 percent for Dalian Meisen Woodworking Co. Ltd., 21.78 percent for Rizhao Foremost Woodwork Manufacturing Co. Ltd.; 16.41 percent for Chinese producers not selected for individual review; and 229.24 percent for Chinese producers that failed to cooperate with the investigation. Most Chinese producers who cooperated with the investigation will receive the 16.41 “all others” rate.

Dept. of Commerce issued a fact sheet on the action: https://www.woodworkingnetwork.com/news/woodworking-industry-news/dept-commerce-fact-sheet-china-cabinet-duty-investigation.

The American Kitchen Cabinet Alliance (AKCA), which initiated the petition accusing China of unfair trade practices, commended the action, calling it an important step to address subsidized cabinet imports.

“Today’s determination gives the American kitchen cabinet industry the hope it needs in our fight against China’s unfair trade practices,” said Stephen Wellborn, director of product and research development, Wellborn Cabinet and an AKCA member. “Americans deserve to know that we are on their side, fighting for their right to a job that has spanned generations with a true American tradition of ‘Made in the USA’ cabinetry. With over 250,000 American jobs on the line, this is an overall positive determination for the American people, and I thank the Commerce Department for their decision.”

“At the core of Marsh is a commitment to positively impact the lives of the extended Marsh family – our employees, builder and dealer partners, suppliers, homeowners and the communities in which we work and live,” said Edwin Underwood, president and COO of Marsh Furniture Co. “Today’s determination allows us to reaffirm with confidence the commitment we made to our employees and business network when Marsh first opened its doors over 110 years ago.  I applaud the Department of Commerce for today’s verdict.”

“The decision delivered today at the Department of Commerce is an important step,” said Mark Trexler, president and CEO at Master WoodCraft Cabinetry. “Illegally subsidized Chinese imports of kitchen cabinet and bath vanities into the United States have injured this important multi-billion-dollar American industry. We welcome this preliminary determination from the Commerce Department and ask the agency to continue its thorough investigation into Chinese subsidies for the final determination.”

Calling the DOC's affirmative preliminary determination harmful to cabinet distributors, particularly those serving the RTA industry, the American Coalition of Cabinet Distributors (ACCD), a group of U.S. distributors, dealers, contractors, installers and importers, issued the following statement:
 
“Yesterday, the Commerce Department made a preliminary finding of countervailable subsidies in the trade case involving Wooden Cabinets and Vanities from China. While we have not yet had a chance to study the written decision in detail, it is important to understand that, even if calculated legitimately, a finding that the Chinese industry received subsidies from the Chinese Government does not prove that imports of wooden cabinets and vanities from China caused injury to the petitioner—which the facts clearly show they did not.

“This is only one step in a long process. The ACCD will continue to vigorously oppose this trade petition.  Even if Commerce calculates both countervailing duty and anti-dumping duty rates, no duties will be collected if the U.S. International Trade Commission finds no material injury caused by these imports.  We fully expect that the ITC will reach such a decision given the facts of this case.

“The trade petition is an attempt by a handful of cabinet companies to take advantage of U.S.-China trade tensions and convince the U.S. government to eliminate competition in the cabinet market.  Many of the companies who filed this case import products from China themselves and won’t bring back jobs to the U.S. if duties are imposed on imports, but will instead shift more of their production to already established supply chains in countries like Vietnam and Mexico. The American Coalition of Cabinet Distributors will ensure that the facts are brought forward in this trade case and we are confident that the government will determine that the petitioners are not being injured by imports of RTA cabinets from China.”

The Commerce Department is currently expected to issue its final determination in this investigation by early 2020. While the preliminary margins indicate the level of subsidies likely to be found in the final determination, the duty rate to which the Chinese cabinet and vanity imports will be subject will not be finalized until the agency makes its final determination. 

On March 6, 2019, the AKCA initiated one of the largest trade cases ever filed against Chinese imports at the International Trade Commission and the Department of Commerce, claiming China’s "manipulation and unfair trade practices" in the wooden cabinet and vanity production industry have led to a more than 75 percent rise in Chinese imports of kitchen and bath cabinetry in the last few years. In 2018, imports of wooden cabinets and vanities from China were valued at approximately $4.4 billion, almost half of the estimated $9.6 billion American market.

The AKCA is comprised of 50 companies based across the United States. The group said it looks forward to the next steps at the Commerce Department to continue its efforts to push back on unfairly traded Chinese imports and ensure a level playing field for American workers. AKCA is represented by Tim Brightbill, Wiley Rein LLP.  For information visit kitchencabinetfairtrade.com.

The ACCD is composed of distributors, dealers, contractors, installers and importers of ready-to-assemble cabinets.  The group said it is dedicated to fighting the trade case filed with the ITC and U.S. DOC against imports of RTA cabinets from China. For information visit americancabinetdistributors.org.

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