Antidumping, round 2
Review could change import duty rates
By Thomas Russell -- Furniture Today, January 1, 2006
High Point — The next chapter in the antidumping saga is about to begin.
This month, the U.S. Department of Commerce will begin an administrative review of import duties imposed on Chinese-made wood bedroom furniture a year ago.
As part of that process, it will accept requests to review the duties assigned to specific manufacturers. The review period opens Jan. 4, the one-year anniversary of the date the original order took effect. Anyone seeking a review of a company has about a month from Jan. 4 to file a claim.
The process gives manufacturers a chance to have their duties lowered, but it also could result in higher duties, particularly for manufacturers that supporters of the original antidumping investigation say should be paying more.
According to the Department of Commerce's schedule, the preliminary administrative review is expected to last 245 days from the end of January, and a final review will be completed 372 days from the end of January. The preliminary review can be extended by 120 days and the final review can be extended by 60 days.
Other than citing those parameters, DOC officials can't say how long the process will take. It largely depends on how many companies it must review.
Original antidumping supporters such as Vaughan-Bassett Furniture will likely play a role in the process.
"We have not had a discussion of who we would ask for a review on yet, but I am sure we will talk about that in the next couple of weeks," said Wyatt Bassett, Vaughan-Bassett executive vice president. "If there are companies that are the most egregious dumpers who were not included in the original investigation, those are people we would like to see investigated this time."
The antidumping issue arose in mid-2003 when a group of U.S. manufacturers called the American Furniture Manufacturers Committee for Legal Trade accused Chinese wood bedroom manufacturers of selling product in the U.S. market below cost. They and other industry watchers have blamed the influx of imports for job losses in U.S. furniture manufacturing.
In December 2004, the Department of Commerce determined that dumping had occurred, and imposed duties ranging from 2.32% to 198.08%.
Many companies received a rate of 6.65%, known as the Section A rate. That figure was based on the weighted average of rates for several of the largest Chinese manufacturers, called mandatory respondents.
In addition to changing rates for individual companies, the administrative review could affect the Section A rate.
The review process is a standard part of an antidumping initiative and comes as no surprise. However, it still dredges up memories of perhaps the most divisive issue the industry has faced. It also concerns importers, who typically are the ones that pay the duty on imported goods.
"It's a massive undertaking," said Larry Webb, president and CEO of manufacturer and importer Pulaski Furniture, noting that two of his key Chinese suppliers are seeking individual reviews. "It's going to be a long, drawn-out process because there are so many companies to review and they haven't decided what the procedures will be because it will be such a big case."
How the duties will be affected is anyone's guess.
"You have to be concerned about it," Webb said. "It could have an adverse effect on numerous suppliers. ... Any percentage point above the current rate will have some significance. And nowadays, we are all fighting for that one-point margin."
Ron O'Dell, president of Trade Masters, said he doesn't plan to ask any of his suppliers to file for an administrative review. But during a December trip to China, he spoke with several other factories that planned to request a review on their own.
"The basic contention seems to be that they are not dumping and can prove they are not dumping and that their duty should be zero," he said.
Some importers have shifted their sourcing in order to avoid such uncertainties. Jack DeBonis, president and CEO of Heirloom Traditions by Global Furniture, said that in 2004, 70% of his product mix came from China and the rest was from Indonesia. Now the roles are reversed, with 75% from Indonesia and 25% from China.
"If the original intention of the petitioners was, in fact, to decrease imports, what has really happened is other countries have been empowered, and overall offshore capacity has increased," said DeBonis.
He predicts that prices of Chinese goods will continue to rise, and not just because of antidumping. He believes such issues as currency exchange rates and the rising cost of Chinese labor will ultimately drive up the prices.
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Govt. to review antidumping import duties
Dec 23, 2005
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