The Commerce Department made several changes to the preliminary determination it issued on July 25, 2022, resulting in a reduction in the estimated value of products imported by ADENTRA from Vietnam, subject to potential duties, from US$25 – US$30 million to US$7.6 million. Consequently, a 206% duty rate will be applied against the US$7.6 million worth of imports from Vietnam.
As a result of this final determination, ADENTRA is expected to accrue duties of US$15.7 million, impacting the company’s financial results in the third quarter of 2023.
Rob Brown, President and CEO of ADENTRA, expressed disagreement with Commerce’s Final Determination, asserting that the duty is unwarranted. He believes that the imported products from Vietnam fall outside the scope of Commerce’s definition of “Circumventing Products” and, therefore, should not be subject to duty. ADENTRA claims to possess comprehensive documentary evidence regarding material sourcing in its supply chain, which Commerce allegedly failed to consider. The company plans to appeal the decision through well-established legal avenues, with the intent to vigorously pursue the recovery of any duties paid. However, the timing and ultimate outcome of these efforts are uncertain, as the appeal process is typically a multi-year procedure.
In another related development, the U.S. Commerce Department’s International Trade Administration has issued a final scope determination and an affirmative final determination of circumvention regarding certain hardwood plywood products originating from China and assembled in Vietnam. The investigation found that imports of hardwood plywood completed in Vietnam using plywood components manufactured in China are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on hardwood plywood from China.
The final circumvention findings were made in accordance with relevant sections of the Tariff Act of 1930 and 19 CFR 351.225(g). As a result of the investigation, 37 companies were found to be producing hardwood plywood under the five identified circumvention production scenarios and are now excluded from participating in the certification program established for applicable exports of hardwood plywood from Vietnam.
The final determination confirms the circumvention of AD and CVD duties on Chinese hardwood plywood imports assembled in Vietnam. The decision has implications for specific companies involved in the production of hardwood plywood and impacts the certification program for exports from Vietnam.
Overall, these developments indicate the complexity and challenges of international trade, particularly in the wood manufacturing industry. ADENTRA’s case highlights the significant financial impact that trade disputes can have on companies, and the need for careful consideration and documentation in legal proceedings. The Commerce Department’s final determination on circumvention further emphasizes the importance of fair-trade practices to protect domestic industries and ensure a level playing field in the global market.