Commerce Finds Two-Ply Panels Subject to ADD/CVD on Chinese Hardwood Plywood in EAPA Referral
The Commerce Department on Jan. 21 issued a final scope ruling continuing to find "veneered panels" with only two layers of veneer are subject to antidumping and countervailing duties on hardwood plywood from China (A-570-051/C-570-052), and that their processing in Vietnam into plywood by adding face and back veneers does not substantially transform the panels into a product of Vietnam.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Confirming its preliminary ruling in a final ruling issued in response to a referral from CBP during an Enforce and Protect Act evasion investigation (see 2108310051), the agency ruled the plywood, exported from Vietnam by Finewood Company Limited, remains subject to AD/CV duties even after the Vietnamese processing into plywood.
The scope of the orders on Chinese hardwood plywood covers “hardwood and decorative plywood, and certain veneered panels.” While the scope defines hardwood and decorative plywood as “consisting of two or more layers or plies of wood veneers and a core,” it does not define “veneered panels.” Finewood continued to argue that the scope requires three-ply panels to be considered subject merchandise -- two veneers and a core -- but Commerce found that veneered panels are a distinct product covered by the scope, and said the scope language is ambiguous as what is meant by the term.
Commerce looked to, among other things, the explanatory notes to the tariff schedule, which define veneered panels as “panels consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by gluing under pressure.” Applying that definition, Commerce found that two-ply panels are “veneered panels” under the scope of the ADD/CVD orders on hardwood plywood, and that, as exported from China to Vietnam, Finewood’s two-ply panels are subject to AD/CV duties.
The agency also continued to find no substantial transformation by way of the addition of face and back panels in Vietnam. First, the Chinese two-ply panels, by virtue of their gluing and assembly process, have the same essential character of the plywood exported from Vietnam, Commerce said. And the processing in Vietnam, as well as the value added in Vietnam, are less intensive and significant than the processing and value added in China, respectively. The level of investment in China is also more intensive, and the goods remain the same class or kind of merchandise after processing, Commerce said.