On March 6, 2019, the American Kitchen Cabinet Alliance (Alliance) filed antidumping (AD) and countervailing duty (CVD) petitions with the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (Commission) against imports of wooden cabinets and vanities from China. The Alliance consists of U.S. producers of wooden cabinets and vanities: ACProducts, Inc., American Woodmark Corporation, Bellmont Cabinet Co., Bertch Cabinet Manufacturing, The Corsi Group, Crystal Cabinet Works, Inc., Dura Supreme Cabinetry, Jim Bishop Cabinets, Inc., Kitchen Kompact, Inc., Koch & Co., Inc., Kountry Wood Products, LLC, Lanz Cabinets Incorporated, Leedo Cabinetry, Marsh Furniture Company, Master WoodCraft Cabinetry LLC, MasterBrand Cabinets, Inc., Nation’s Cabinetry, Showplace Wood Products, Inc., Smart Cabinetry, Tru Cabinetry, Wellborn Cabinet, Inc., Wellborn Forest Products, Inc., Woodland Cabinetry, Inc., Woodmont Cabinetry, W. W. Wood Products, Inc. and two other undisclosed companies. According to the Alliance, wooden cabinets and vanities imported from China are being sold at less than fair value in the United States and are subsidized, causing material injury and threatening further material injury to the domestic industry if trade remedy duties are not imposed.

Wooden cabinets and vanities consist of a cabinet box (which typically includes a top, bottom, sides, back, base blockers, ends/end panels, stretcher rails, toe kicks and/or shelves) and may or may not include a frame, door, drawers and/or shelves. The products subject to these investigations are designed for permanent installation (including floor mounted, wall mounted, ceiling hung or by attachment of plumbing), and wooden components thereof. These include wooden cabinets and vanities with or without wood veneers, wood, paper or other overlays, or laminates, with or without non-wood components or trim such as metal, marble, glass, plastic, or other resins, whether or not surface finished or unfinished, and assembled, unassembled and/or “ready to assemble” (RTA), also commonly known as “flat packs,” except those covered by other AD and CVD orders. The products covered by these investigations are made substantially of wood products, including solid wood and engineered wood products (including those made from wood particles, fibers or other wooden materials such as plywood, strand board, block board, particle board or fiberboard), or bamboo.

The Alliance states that wooden cabinets and vanities, and their components, enter the United States under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 9403.40.9060, 9403.60.8081 and 9403.90.7080. The proposed scope of the petition also includes wooden cabinets and vanities whether or not they are imported attached to, or in conjunction with, faucets, metal plumbing, sinks and/or sink bowls, or countertops. For such products, the petitions state that only the wooden cabinet or vanity is covered by the scope.

According to the Alliance, from January-November 2016 to January-November 2018, imports of wooden cabinets and vanities from China increased 19.9 percent. The Alliance further alleges that these products are unfairly subsidized by Chinese government programs, including preferential loans and interest rates, grant and tax benefit programs, VAT program and export credit subsidies. As a result, the Alliance claims that subsidized and unfairly priced imports of wooden cabinets and vanities are having significant, negative price effects resulting in lost sales and revenue to the domestic industry, including the closure of at least two U.S. cabinet manufacturers.

The petition lists both a large number of foreign producers/exporters that shipped wooden cabinets and vanities to the United States at allegedly dumped and subsidized prices from China and the U.S. importers of those products.

Commerce will determine by March 26, 2019, whether to formally initiate the investigations and, if Commerce does, the Commission will decide within 25 days after that whether there is a reasonable indication of existing material injury or threat of material injury to the domestic industry that will require continuation of the investigations.

Thompson Hine is monitoring this matter closely. For additional information or to obtain a copy of the petition, please contact us.