In a statement, the United States said it would examine whether hardwood plywood imports that have been completed in Vietnam using Chinese components are circumventing U.S. duties on imports from China.
The move is likely to see similar duties on Vietnamese imports.
In a statement the U.S. Commerce Department said it was initiating inquiries in response to requests from the Coalition for Fair Trade in Hardwood Plywood which represents plywood makers in North Carolina and Oregon.
If the U.S. probe concludes that Vietnamese producers are circumventing existing U.S. anti-dumping rules or countervailing duties, the U.S. Commerce Department would instruct U.S. Customs officials to begin collecting cash deposits on plywood from Vietnam.
In December 2017, the U.S. International Trade Commission had found that hardwood plywood imports from China, which are typically used in wall panels, desk tops, table, kitchen cabinets, and flooring, harm U.S. producers, thus attracting U.S. duties on imports for five years.
The Commerce Department had imposed an anti-dumping duty of 183.6% and anti-subsidy duties ranging up to 194.9% on Chinese imports of hardwood plywood after finding they were being subsidized and dumped in U.S. markets. At the time, it said the imports from China totaled $1.12 billion.
“The level of transshipment and circumvention through Vietnam has been staggering,” said Tim Brightbill, a partner at the Wiley Rein law firm and coalition counsel.
In 2019, the Vietnamese government had instructed manufacturers to use domestically-sourced raw materials to avoid attracting U.S. tariffs.
In 2018, U.S. imports of hardwood plywood jumped to $238 million, compared to $28 million a year ago, following imposition of duties on Chinese exports. In 2019, it doubled to $468 million.
Chinese imports dropped from $1.12 billion in 2017 to $143 million in 2018 and $66 million in 2019.