The U.S. Department of Commerce (DOC) will "substantially" increase countervailing and antidumping duties on engineered wood flooring from their current preliminary rates when it makes its final rulings in the matters during the fourth quarter of 2011, according to legal counsel for the Coalition for American Hardwood Parity (CAHP).
The U.S. Department of Commerce (DOC) will "substantially" increase countervailing and antidumping duties on engineered wood flooring from their current preliminary rates when it makes its final rulings in the matters during the fourth quarter of 2011, according to legal counsel for the Coalition for American Hardwood Parity (CAHP).
"We believe that the rates will be higher," counsel Jeff Levin said during a follow-up interview in the wake of the DOC releasing its preliminary determination in the antidumping case on Friday. DOC assigned a majority of Chinese manufacturers an antidumping rate of 10.88 percent; however, that duty is paid by the U.S. importer of record. For the purposes of its investigation, Levin believes DOC has only been presented with "the most favorable numbers that the Chinese companies were able to gather." In his mind, one side of the equation-his group's side-remains uncalculated.
At the heart of the matter is DOC's decision to look at Philippines as the investigation's "surrogate country"; for trade cases involving China, DOC uses a surrogate off which it bases price models (for raw materials, overhead, labor, etc.). The price models are used in order to determine market costs for a particular product. DOC then compares the sale price of that product in China and the U.S. to determine whether Chinese manufacturers are dumping. But CAHP is "not aware of any significant production of multilayered wood flooring in the Philippines," Levin said. He continued, "The more proper surrogate to use is Indonesia. Indonesia has a very viable multilayered wood flooring manufacturing industry."
Even though DOC has yet to determine that half of the companies under investigation are actually dumping product, Levin said it is just a matter of time before evidence proves otherwise. Next in the investigation is the process of "verification," where DOC representatives visit Chinese manufacturers on-site. "We do not believe that product is not being dumped," Levin said in response to Zhejiang Layo Wood Industry Co. Ltd. and Zhejiang Yuhua Timber Co. Ltd. being given the "de minimis" duty rate that shows it is not dumping product nor receiving subsidies from the government of China. "That's why there is a preliminary determination, a lot of activity after that, and then a final determination. Significant changes often do occur between those two determinations."
Coupled with the DOC's preliminary countervailing duty it handed down in March, Levin says about 75 percent of all engineered wood flooring imported into the U.S. from China is now subject to additional import duties, ranging from roughly 13 percent to 109 percent.
