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Industry responds to latest ITC antidumping ruling

June 9/16, 2014; Volume 27/Number 29

ITCWashington, D.C.—Antidumping duties were raised for 70 Chinese companies involved in the years-long engineered hardwood flooring dispute with the International Trade Commission (ITC), as their tariffs increased from 3.30% to 5.74%.

However, Armstrong, whose products are made by Kunshan Yingyi-Nature Wood Industry Co., and a second company, Nanjing Minglin Wooden Industry Co., saw its assessment rates drop to zero.

As a “mandatory respondent,” Armstrong provided information at the behest of the Commerce Department as part of its investigation. “It was previously our intention that the rates assessed to Armstrong were incorrectly assessed and we should not be penalized with antidumping or countervailing duties,” Milton Goodwin, vice president of hardwood products for Armstrong World Industries, told FCNews. “We are unique in that we are the only U.S. company to have 100% ownership—there are no subsidies provided to us by any Chinese agency—of our plant in China, and we do not ‘dump’ our products into the U.S.”

Goodwin called the ruling “a fair assessment of our position.”

Companies that did not submit paperwork for the case—a mere handful, according to one executive—were assessed a rate of 58.84%.

The companies whose duties were raised were accused of dumping flooring into the U.S. at less than fair market value, thus undercutting domestic producers.

This is the latest development in a more than three-year dispute that began when the Coalition for American Hardwood Parity (CAHP), a group of U.S. manufacturers of engineered wood flooring, filed a petition with the Commerce Department requesting an investigation into unfair trade practices on the part of Chinese manufacturers. The petition asserted that U.S. manufacturers have suffered “material competitive injury” as a result of government-subsidized Chinese companies selling products below the market rate. The petition requested the U.S. government apply antidumping and countervailing duties of 100% on engineered wood flooring imports from China to “restore competitive parity in the U.S. market.”

Dan Natkin, director, hardwood and laminate for Mannington, said the largest issue remains the way the rate is determined through surrogate countries. “Some recent changes to [Commerce Department] policy may affect this in a greater manner next year,” he said. “To address the rate specifically, for any company whose rate rose in this first annual review, the incremental amount (2.24%) is retroactively liable to day one of the order (December 2011). The second annual review process is now in full swing with anticipated results around May of next year.”

Michael Martin, president and CEO of the National Wood Flooring Association (NWFA), said, “In terms of our position, we support a level playing field.”

One U.S.-based executive who sources products from China said the way the system is currently set up “helps the domestic producers put up a fairly major barrier against imports.”