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Preliminary anti-dumping duties announced

Washington—A preliminary determination was made in the case against  unfair dumping duties of multilayered wood flooring from the People’s Republic of China today. The International Trade Commission released the following in a fact sheet outlining its decision:

•Commerce preliminarily determined that Chinese producers/exporters have sold multilayered wood flooring at margins ranging from zero to 82.6516% ad valorem.

•Mandatory respondents: Zhejiang Yuhua Timber Co., Ltd. (Yuhua) and Zhejiang Layo Wood Industry Co., Ltd. (Layo) received preliminary de minimis dumping rates of zero percent; the Samling Group (Samling) received a preliminary dumping rate of 10.88 percent.

•Petitioner alleged targeted dumping on a regional- and customer-specific basis for all three mandatory respondents. Commerce found targeted dumping with respect to sales made by Layo and Samling; however, the margin for Layo remains de minimis even with a finding of targeted dumping.

•73 additional exporters qualified for a separate rate of 10.88 percent. All other Chinese producers/exporters are subject to the China-wide preliminary dumping rate of 82.65 percent.

•As a result of this preliminary determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates.

•The petitioner for this investigation is: The Coalition for American Hardwood Parity, an ad hoc association of U.S. manufacturers of multilayered wood flooring, with the following member companies: Anderson Hardwood Floors, LLC (SC), Award Hardwood Floors (WI), Baker’s Creek Wood Floors, Inc. (MS), From the Forest (WI), Howell Hardwood Flooring (AL), Mannington Mills, Inc. (NJ), Nydree Flooring (VA), and Shaw Industries Group, Inc. (GA).

•The merchandise covered by the investigation is multilayered wood flooring, composed of an assembly of two or more layers or plies of wood veneers in combination with a core. The core may be composed of hardwood or softwood veneer, particleboard, medium-density fiberboard, high density fiberboard, stone and/or plastic composite, or strips of lumber placed edge-to-edge. Multilayered wood flooring is typically manufactured with a “tongue-and-groove” construction. These products are generally used as the floor in residential or commercial building, as well as in schools, showrooms, gymnasiums and other constructions.

•Imports of the subject merchandise are provided for under the following categories of the Harmonized Tariff Schedule of the United States (HTSUS): 4412.31.0520; 4412.31.0540; 4412.31.0560; 4412.31.2510; 4412.31.2520; 4412.31.4040; 4412.31.4050; 4412.31.4060; 4412.31.4070;4412.31.5125; 4412.31.5135; 4412.31.5155; 4412.31.5165; 4412.31.3175; 4412.31.6000; 4412.31.9100; 4412.32.0520; 4412.32.0540; 4412.32.0560; 4412.32.2510; 4412.32.2520; 4412.32.3125; 4412.32.3135; 4412.32.3155; 4412.32.3165; 4412.32.3175; 4412.32.3185; 4412.32.5600; 4412.39.1000; 4412.39.3000; 4412.39.4011; 4412.39.4012; 4412.39.4019; 4412.39.4031; 4412.39.4032; 4412.39.4039; 4412.39.4051; 4412.39.4052; 4412.39.4059; 4412.39.4061; 4412.39.4062; 4412.39.4069; 4412.39.5010; 4412.39.5030; 4412.39.5050; 4412.94.1030; 4412.94.1050; 4412.94.3105; 4412.94.3111; 4412.94.3121; 4412.94.3131; 4412.94.3141; 4412.94.3160; 4412.94.3171; 4412.94.4100; 4412.94.5100; 4412.94.6000; 4412.94.7000; 4412.94.8000; 4412.94.9000; 4412.94.9500; 4412.99.0600; 4412.99.1020; 4412.99.1030; 4412.99.1040; 4412.99.3110; 4412.99.3120; 4412.99.3130; 4412.99.3140; 4412.99.3150; 4412.99.3160; 4412.99.3170; 4412.99.4100; 4412.99.5100; 4412.99.5710; 4412.99.6000; 4412.99.7000; 4412.99.8000; 4412.99.9000; 4412.99.9500; 4418.71.2000; 4418.71.9000; 4418.72.2000; and 4418.72.9500. In addition, imports of subject merchandise may enter the United States under the following HTSUS subheadings: 4409.10.0500; 4409.10.2000; 4409.29.0515; 4409.29.0525; 4409.29.0535; 4409.29.0545; 4409.29.0555; 4409.29.0565; 4409.29.2530; 4409.29.2550; 4409.29.2560; 4418.71.1000; 4418.79.0000; and 4418.90.4605. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope in this proceeding is dispositive.

•From 2007 to 2009, imports of multilayered wood flooring from China increased 76 percent by quantity. In 2009 imports of multilayered wood flooring were valued at an estimated $119.7 million.

Next steps

Commerce is currently scheduled to make its final determination in August 2011.

If Commerce makes an affirmative final determination, and the U.S. International Trade Commission (ITC) makes an affirmative final determination that imports of multilayered wood flooring from China materially injure, or threaten material injury to, the domestic industry, Commerce will issue an AD order. The ITC is scheduled to make its final injury determination on or about September 16, 2011.

Jonathan Train, president of the Alliance for Free Choice & Jobs in Flooring (AFCJF), was pleased with the outcome. “The fact that the third Mandatory received a rate of only 5% of what the Petitioners had originally demanded proves our point that the Petitioners’ claims were exaggerated and wildly inaccurate.

“This means that more than 95% of imported flooring will receive the rate of 10.88% and much of it will enter at zero,” he continued. “The “all industry” rate of 82.6% applies only to an insignificant amount of imports.”

Jeff Levin, counsel for the Coalition for American Hardwood Parity (CAHP), stated, “Even with the 0%rates that were preliminarily assigned to two of the Chinese producers, the vast majority of imports of China – more than 3/4 of all imports from that country – are now subject to dumping duty deposits.”  According to Mr. Levin, the dumping margins are added to the countervailing duty margins issued last month.  As a result, the vast majority of imports from China are subject to a total duty deposit requirement of at least 13 percent, with a significant portion of these imports subject to a combined rate of 109 percent.

Levin observed that the Department’s preliminary decision to use the Philippines, which does not have an appreciable multi-layered wood flooring industry, rather than Indonesia as the primary “surrogate country” for China resulted in anomalously low dumping margin calculations.  The proper choice of “surrogate country” will be a central focus before the Department makes its final determination.  ”The CAHP has in hand data and information not yet considered by the Commerce Department which we have strong reason to believe will greatly alter the preliminary calculations, and which calls into serious question the accuracy of some of the information presented by the Chinese producers,” said Levin.

According to Levin, in about half of the antidumping investigations regarding China which have been conducted over the past few years, there have been significant, and often times very significant, increases in the dumping margins between the preliminary and final determinations.  An importer’s reliance on lower preliminary dumping margins that are susceptible to substantial increases at the final stage can expose these companies to enormous retroactive liability.

The CAHP notes that as a matter of historical record, there are now, for the first time, formal determinations by the U.S. government that the vast majority of imports of multilayered wood flooring are being traded unfairly in the United States.  “No one should feel comfortable about the pervasiveness of unfair trading in the U.S. market.  The proposition that ‘cheap is good, regardless of whether it is fair or not,’ has been rejected by the United States and most of our trading partners – including China when it joined the WTO,” said Levin.  “Dumping, like that found by the Department on Friday, harms all parties in the commercial channel – not just domestic manufacturers, but ultimately importers, distributors and consumers as well.”