Preliminary countervailing duties up to 111% on Chinese imports, antidumping tariffs may follow. Indufor expects that the high import tariffs on Chinese hardwood plywood will open new business opportunities to European and Russian plywood producers.
On 18 April 2017, the US Department of Commerce (DOC) announced that it had made a preliminary finding of unfair government subsidies in imports of hardwood plywood products from China. This led to a decision to impose preliminary countervailing duties ranging from 9.89% to 111.09% until the investigation is completed in order to protect the US plywood industry from economic harm caused by imports of these subsidised products.
The investigation follows a petition from the Coalition for Fair Trade in Hardwood Plywood, a group of six privately owned US plywood producers into the imports, which are used in wall panels, kitchen cabinets, table and desk tops, and flooring. The petition follows a surge of Chinese hardwood plywood imports. In January 2017, Chinese imports of hardwood plywood were 35% higher than in January 2016.
Sixty-three companies, who did not cooperate fully with the investigation received a duty of 111.09%, while others will have a duty of 9.89%.
Further investigations are ongoing, and the Department of Commerce will likely announce its final determination early July. If the determination is affirmed, the US International Trade Commission will then have to approve this decision. If the ITC concurs with its decision the CVD order will likely take definitive effect at the end of October.
In addition, the Coalition for Fair Trade in Hardwood Plywood awaits the DOC’s preliminary (expected in June) and final (expected in November) determinations in the companion anti-dumping duty investigation of hardwood plywood from China.
Indufor expects that the high import tariffs on Chinese hardwood plywood will have the following implications on the market.
- Increased prices of Chinese hardwood plywood in the US
- Increased prices of birch-faced raw plywood in the US
- Diminshed hardwood plywood imports to the US from China – Chinese hardwood plywood producers will probably be more aggressive in their search for alternative markets to the US (e.g. Europe)
- Increased plywood imports to the US from Europe and Russia – new business opportunities especially to European poplar plywood, and Russian birch and mixed plywood, as well as birch veneer producers.
- Increased US plywood domestic production.
In 2016, the share of the US market was 18% of total Chinese plywood exports. The export volume was slightly above 2 million m³. In 2016, Russian birch plywood exports to USA increased 25% to 339 000 m³ (2015: 272 000 m³).
Russian birch veneer (Source: Indufor)