The U.S. International Trade Commission (ITC) last week voted 4-0 to apply antidumping and countervailing duties on imports of Chinese hardwood plywood entering the United States. The ITC’s affirmative determinations are just a precursor to the Commerce Department’s actions which is likely to issue antidumping and countervailing duty orders on imports of this product from China. This will be a bad news for Indian plywood manufacturers as the Chinese players will now look out for new markets to dump their products and India may be one of the countries at the receiving end.
The ITC determined that the imports from China harm domestic producers since they are dumped on the U.S. market at less than fair value and receive subsidies from the Chinese government. The practices forced many American hardwood plywood producers to operate at less than 50 percent capacity. Chinese hardwood plywood imports increased 22 percent from 2014 to 2016 and another 26 percent during the first half of 2017.
The ITC vote will activate tariffs on Chinese hardwood plywood imports by the Department of Commerce of 183.6 percent for antidumping and countervailing duties up to 194.9 percent.
Whenever China has encountered entry barriers to its products in other market in the past, it had diverted its products to other markets, including India which is a price sensitive market. It had happened in case of ceramic tiles and it may happen now in case of plywood also.