November Newsletter, ITC Information

On November 9, 2011, the U.S. International Trade Commission (ITC) issued a final affirmative determination in the antidumping (AD) and countervailing duty (CVD) investigations of Multilayered Wood Flooring (MLWF) from China. This determination confirmed that imports of engineered wood flooring from China are being illegally dumped into the U.S. and are causing harm to the domestic industry. As a result of the ITC’s final affirmative determination, the U.S. Department of Commerce will formally issue an AD and a CVD order against imports of the products from China. The orders are expected to be issued by the end of November 2011. That will be the very last step in this investigation process, which began in October 2010.

The AD/CVD orders will cover all imports of the engineered hardwood flooring products from China, except product that is produced and exported by one company (Zhejiang Yuhua Timber Co., Ltd.). This means that approximately 90 percent of all multilayered (engineered) wood flooring from China will covered by these orders. There are no exclusions for particular types of MLWF products. For example:
• Unfinished MLWF manufactured in China and finished in the United States, or in a third country like Canada is considered a product of China, and is covered by the orders.
• Unfinished and unprofiled MLWF manufactured in China and finished and profiled in the United States or a third country is considered a product of China, and is covered by the orders.

The duty rates that were announced by the Commerce Department in October were the cash deposit rates for estimated AD/CVD duties. The actual AD/CVD duties owed on Chinese MLWF imported during the 12-month period beginning when the orders are officially published (approximately November 30, 2011) will be based on a comparison of the price at which the product is sold to the U.S. importer and the “home market” price of the product during that same 12-month period. This comparison – or calculation – is done through what is known as the retroactive administrative review process. That process will not begin until December 2012, and typically takes at least one-year to complete.

As a result, a U.S. importer will not know what its actual liability for AD/CVD duties on products imported during the next 12 months until about December 2013 – two years from now. If the actual duties owed are higher than the cash deposit rate, the U.S. importer will receive a bill from Customs for the difference, plus interest.

For more on this and other topics, please check out our November Newsletter here. As always, you can look up older newsletters in our Document Library.