US Extends Duty Evasion Investigation into Plywood from Vietnam

Vietnam’s hardwood plywood exports to the US increased from $112.3 million in 2018 to $356.7 million last year. Photo: MoIT

Accordingly, the DOC plans to issue the conclusion on October 17, VietnamPlus reported.

Currently, the US is applying an anti-dumping duty of 183.36% and an anti-subsidy tax of 22.98% to 194.9% on the product from China.

US customs said Vietnam’s hardwood plywood exports to the US increased from $112.3 million in 2018 to $226.4 million in 2019, $248.5 million in 2020 and $356.7 million last year. The export turnover expanded by 57.6% in 2021 as compared to the year before the initiation of the investigation.

According to the DOC’s preliminary conclusions, plywood from Vietnam using materials from China should be subject to the same anti-dumping and anti-subsidy duties applied to China. If the materials are produced in Vietnam or other countries, the products will be exempt from any duties.

The department will ask the US Customs and Border Protection (CBP) to continue suspending liquidity and require importers to pay a deposit equal to the provisional anti-avoidance tax rate for shipments from Vietnam since June 17, 2020 when the investigation was announced.

Vietnamese exporters and US importers have been allowed to participate in the self-certification mechanism to be excluded from the evasion measure.

Vietnamese exporters and US importers have been allowed to participate in the self-certification mechanism to be excluded from the evasion measure. Photo: VNA

However, the self-certification mechanism is not applied to enterprises that fail to provide information or provide incomplete or inaccurate information as requested by the DOC during the investigation.

Statistics show businesses eligible for the self-certification mechanism made up about 80% of Vietnam’s export value during the investigation period.

Relevant parties should send their written comments on the DOC's preliminary findings, and a written request for a hearing on the comments must be submitted to the department within 30 days of the announcement of the preliminary conclusions. The DOC will also verify the information before issuing a final conclusion.

Assoc. Prof. Dr. Pham Tat Thang from the Vietnam Institute of Industrial and Trade Policy and Strategy under the MoIT, said that Vietnamese businesses must anticipate that the protectionism for domestic production in the US is very high, especially for agricultural products and food, according to Vietnam Investment Review.

“The US’ trade and technical barriers are increasingly stricter to protect the environment and workers. When detecting signs of harming domestic production, the US government immediately adds new regulations and laws to deal with it,” Thang said.

“Many Vietnamese enterprises plan to sell more wooden furniture to the US market, but forget that the US still maintains a multilateral trade policy with basic principles shaped along with liberal and open policy views,” Thang added. “A huge challenge for Vietnamese enterprises also comes from competing with China in order to maintain their market share in the US.”

Wood exports decrease as inflation increases

Vietnam's export value of timber and wood products in June fell by 4.9% annually to $1.5 billion. Photo: congthuong.vn

According to the General Department of Customs, Vietnam's export of timber and wood products in June fell by 4.9% on-year to $1.5 billion. Timber exports in June were estimated at more than $1.03 billion, down 18.1%.

In the first six months, the export value of timber and wood products surged by 2.8% on-year to $8.5 billion. However, the export value of wood products plunged by 4.6% on-year to $6 billion.

Wooden furniture was the key export item in the structure of export timber and wood products in the first five months of this year. However, the export value decreased due to slowing global demand

The impact of the Covid-19 pandemic, the “zero Covid policy” in China and the high input costs due to the Russia-Ukraine conflict caused many countries to face high inflation, so consumers must tighten their spending to decrease demand for non-essential goods like wood products.

Those factors made Vietnam's export value of timber and wood products plunge in the first half of this year.

Nguyen Chanh Phuong, Vice Chairman of the HCM City Fine Arts and Woodworking Association (HAWA), said the US market accounts for 60% of the export value of Vietnam's timber and wood products. Vietnam's wooden furniture exports to the US market are mainly cheap products.

High US inflation has caused low- and middle-income groups to tighten their spending, creating a significant impact on Vietnam's wood product exports, he said, as cited by Viet Nam News.

The local wood industry's enterprises have begun to have signs of a lack of orders from the US market, while some other big markets, such as the EU and the Republic of Korea, have also started showing difficulties due to inflation./.

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