China’s cabinet makers lose US anti-dumping case as trade tensions remain despite phase one deal

Chinese producers and exporters of wooden cabinets and vanities will have to pay additional duties on imports to the United States after losing an anti-dumping case lodged by their American competitors in a sign of ongoing trade tensions despite the signing of the phase one trade deal in January.

The US Department of Commerce said it had determined that Chinese firms had sold wooden cabinets and vanities at “less than fair value in the United States at rates ranging from 4.37 per cent to 262.18 per cent”, according to a notice published on the website of International Trade Institution on Monday.

Anti-dumping rates of 269.91 per cent on Dalian Meisen Woodworking, 122.1 per cent on Rizhao Foremost Woodwork Manufacturing and 13.33 per cent on Ancientree Cabinet will now apply, while all other Chinese exporters will pay a rate of 58.89 per cent.

The initial petition had been filed by the American Kitchen Cabinet Alliance in March 2019, alleging that Chinese companies were exporting cheap goods to the US market.

A final hearing is scheduled for March 24 at the International Trade Commission to determine whether US producers have suffered or been harmed as a result of Chinese subsidies.

“We are very thankful to the US Department of Commerce for the anti-dumping and countervailing duty final determinations. We’re hopeful that on March 24, the International Trade Commission will affirm that the domestic cabinet industry has been injured as a result of unfair trade practices by China. This will help to keep jobs in America and also allow domestic manufacturers to reinvest in their facilities,” said Paul Wellborn, president and CEO of Wellborn Cabinet.

The petition from the trade association received support from more than 40 members of the US Congress, with the Coalition for a Prosperous America, a group pushing for US trade reform, estimating that 250,000 jobs in the American cabinet industry are at risk due to subsidised Chinese imports, which were valued at US$4.4 billion in 2018.

“We are extremely pleased with the Commerce Department decision,” said Coalition for a Prosperous America chair Dan DiMicco, a known China hawk who was an adviser to the Trump administration during the transition period before Donald Trump took office. “Enforcing trade laws works and this new ruling will help domestic manufacturers and workers facing unfairly traded imports of Chinese cabinets and vanities.”

The world’s two largest economies have been involved in a bitter fight over trade issues for over a year and a half, with tariffs on hundreds of billions of dollars worth of goods imposed on Chinese and American products.

Plans to increase duties were shelved and some duties reduced as part of the phase one trade agreement signed in January, but some of the more complex and controversial issues including Chinese government subsidies for domestic industries, are only set to be discussed during phase two negotiations.

China and the US have imposed anti-dumping duties on each other in the past, although the number of investigations has risen 172 per cent since Donald Trump became president in January 2017, the US Department of Commerce said.

In January, US Department of Commerce said it had launched anti-dumping investigations into wood moulding and millwork products, a category which includes doors, moulding, trim, flooring, wall panelling and crown moulding, imports from Brazil and China worth around US$500 million annually.

In a statement, the US Department of Commerce said it estimated possible anti-dumping duties of 86.7 per cent for products from Brazil and 181.2 per cent to 359.2 per cent for those from China. The agency is also conducting an anti-subsidy investigation into the moulding and millwork products from China.

China has also countered US challenges to the prices of Chinese-made products, and in November, the World Trade Organisation gave China permission to impose sanctions on up to US$3.6 billion of US products over American duties on cheap Chinese products.

Additional reporting by Reuters