Part 3 of 3: “CBP Wants YOU! Increased AD/CVD Scrutiny Abounds”
AD/CVD Consequences: Real Live American Disasters
Inflated AD/CVD and high tariffs have real world consequences. One of the hardest-hit industries by high tariffs and AD/CVD besides the steel and aluminum industries is the hardwood industry and those companies who depend upon an inexpensive supply of raw wood and wood products to manufacture goods that are competitive in the U.S. market. Some companies are illegally relying on evasion of the duties by means such as misclassification, undervaluation, and/or transshipment.
As an example, California plywood importer, Plywood Source, blew the whistle to CBP, providing incriminating evidence against five of its competitors: Far East American, Ciel Group, American Pacific Plywood, Liberty Woods International and InterGlobal Forest. CBP claims that they imported plywood made in China and relabeled in Vietnam to circumvent antidumping duties of 188.36% and countervailing duties of 22.98-194.9%.
But the real trickle-down effect of the trade war can be seen not only in its effect on U.S. companies, but also in the lives of small town workers in rural America who don’t care about the politics of trade and tariffs and duties. They just want to support their families.
Take, for example, Solid Wood Cabinets – based in Levittown, PA, with twelve locations in Pennsylvania and New Jersey. Founded in 2002, they had sold over one million pieces of cabinetry and in 2019 sold 4,000 “Dream Kitchens”. They had a 160,000 square foot facility building 1,500 cabinets per week. Their website now carries this message:
2019 created the perfect storm of issues for Our Company starting with the imposition of tariffs of up to 25% on the cabinets that we import from China. This was then compounded by an Anti-Dumping petition filed by a group representing domestic cabinet manufacturers. This caused the vast majority of the Chinese factories to simply stop producing product for the US market and either focus on other markets or commence the relocation of their factories to other Asian countries. This was catastrophic to us and meant that our supply of cabinets virtually dried up leaving us to find alternative products domestically. An affirmative preliminary finding on October 3rd by the US Commerce department meant that [AD/CV] duties of up to 262%, with an average of 39%, were applied to our products in addition to the 25% tariffs that were already in place.