So the wood industry has been hit with another dumping case. If you want to learn more about the plywood case from those directly involved, the petitioners have a website here and a group of responding importers have created a site here.
The case is just developing, and it will be a year before we find out the results and many years before we fully understand the downstream impact if the order goes through. Look for legality issues to potentially play a bigger role in this case than they did in the flooring case-the petitioners are making it one of the key components of their allegations.
As regular readers can guess, I believe that if the order goes through, the results will do more harm for the U.S. as a whole than it will help the domestic plywood manufacturing industry. I look not just at those most directly involved, but those indirectly impacted, those you might call the civilians in the war. I worry about the U.S. kitchen cabinet manufacturing industry and the RV industry and all the others using the imported material. I worry about the American exporter selling logs and lumber overseas.
I worry about the flooring industry too. We just don't know yet where this case will impact us. Plywood and engineered flooring are closely linked at both Customs and the written definitions of scope in both cases. Although the current scope of the plywood case specifically says it does not include engineered hardwood flooring, lawyers are still debating if it covers bamboo flooring. There is also the possibility of plywood underlayment getting caught up, although again, the lawyers and various parties are debating that as well. As always, it will take a while to sort things out.
Definitely some of the U.S. domestic manufacturers who rely on imported plywood are going to be hit. Some U.S. manufacturers produce their own plywood, some buy domestic product and many use a Baltic birch. But others do use Chinese-sourced plywood and they may be seeking new supply. Of course those alternative supplies may suddenly be in short supply or found only at a higher price because of the case.
If the U.S. plywood manufacturers are correct that a dumping order will lead to a huge price increase here, some of that is going to have to impact on the domestic flooring manufacturers. And if the U.S. plywood manufacturers are correct that a dumping order will cause the kitchen cabinet industry and other U.S. companies to start buying domestic production in greater volumes, won't the U.S. flooring industry face a shortage? Or see a combination of a supply shortage and higher price for the Baltic birch? This, like most dumping orders, is very likely to hurt the smaller players in the industry.
If the plywood order goes through, we won't know the long-term impacts for years. We are still seeing downstream ripples from the flooring case, and I suspect that if the flooring case isn't overturned in the appeal, the negative impact on the U.S. distribution and retail industries will be much greater each subsequent year. Time will tell, but I fear that this case will eventually be yet another blow to our hardwood flooring industry.