The U.S. International Trade Commission (ITC) this morning determined that domestic engineered wood flooring manufacturers have been materially injured by their counterparts in China through government subsidization and dumping, or selling a product at less than fair value. As a result of the ITC's action, the U.S. Department of Commerce (DOC) will issue antidumping and countervailing duty orders on imports of engineered wood flooring from China.
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The U.S. International Trade Commission (ITC) this morning determined that domestic engineered wood flooring manufacturers have been materially injured by their counterparts in China through government subsidization and dumping, or selling a product at less than fair value. As a result of the ITC's action, the U.S. Department of Commerce (DOC) will issue antidumping and countervailing duty orders on imports of engineered wood flooring from China.
The decision pleased the Coalition for American Hardwood Parity (CAHP), the group of seven U.S. wood flooring manufacturers that first petitioned federal regulators to investigate the trading in October 2010.
"We are very pleased with the ITC's determination this morning," said Jeff Levin, counsel for the CAHP. "This marks a successful conclusion to a hard-fought battle, and represents an important win for American manufacturing and the fight to keep honest paying manufacturing jobs in this country."
On the other hand, the decision is not what the Alliance For Free Choice and Jobs in Flooring (AFCJF) was hoping for. That group formed in February 2011 to directly oppose the petitioners, the CAHP.
"Of course we are all very disappointed that the ITC failed to recognize fundamental flaws in the petitioners' case," said Jonathan Train, the AFCJF's president. "We see this as a failure of the system rather than any validation of the petitioners' claims."
The AFCJF will determine whether it will appeal the ITC's ruling, saying it is a "viable option." In the end, Train said the work done by his group has helped keep tariffs lower than if no companies had opposed the petitioners in the matter.
"The fact alone that we were able to achieve low duty rates at both the preliminary and final rulings has minimized the disturbance to the industry," Train said. "This gives all importers breathing room to organize their long term supply."
Moving forward, U.S. companies importing engineered wood flooring from China will pay cash deposits requirements for estimated antidumping and countervailing duties determined last month.
The overwhelming majority of wood flooring companies present at the NWFA's open house, which started today, thought the ITC made the right decision in affirming the unfair trade.
Dan Natkin is director of wood business for Mannington Wood Floors (Salem, N.J.), one of the CAHP's seven members. "Ultimately, it's a good next step in the process," Natkin said. "We are pleased the government found [there was] injury to our industry. Hopefully the decision will help relieve some of the abominable pricing that's been in the market, and help the industry recover from what's been a tough couple of years heavily influence by the Chinese."
Greg Blanke, president of Boardwalk Hardwood Floors (Crestwood, Mo.), said increased pressure on engineered wood flooring from China could make buying solid wood flooring more appealing to consumers. "The decision could eliminate that low-cost engineered wood flooring to where solid woods can be more affordable," he said. "It will help everybody, even manufacturers of solid wood flooring."
Blanke is also convinced the decision is beneficial to anyone competing against big box stores. "This will help local distributors and local retailers since [Chinese engineered wood flooring] is the big box stores' main product."
Ralph Kuehn, president of contractor/retailer Champion Floor Company (St. Louis), agrees. "This will absolutely help out business. [Big box retailers] outsell me quite often. This should make it a lot easier for me to be competitive with them."
Michael Martin, CEO of the NWFA, characterized the decision as an important step to normalizing the marketplace. "From the beginning, NWFA has stated its opposition to any dumping in the U.S. market or elsewhere and encourages all manufacturers of wood flooring to participate in fair and equal trade, he said. "Now, even though not fully complete, the duties are spelled out more specifically, allowing for better planning. At this phase of the ruling, business can move forward and back to the manufacturing and selling of wood flooring."
Within the coming weeks, the ITC is expected to release more details regarding its determination. Its six members voted 4-2 in favor of affirming the damage to domestic manufacturers. Vice Chairman Irving A. Williamson and Commissioners Charlotte R. Lane, Shara L. Aranoff and Dean A. Pinkert voted in the affirmative, while Chairman Deanna Tanner Okun and Commissioner Daniel R. Pearson voted in the negative.
