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Chinese kitchen manufacturing operation. (Image courtesy AKCA.)
WASHINGTON, D.C. - After a year-long effort, U.S. kitchen cabinetmakers are seeing their major Chinese competitors hit with duties levied by the U.S. Commerce Department averaging 59 percent, with some as high as 269 percent. Collections began April 1.
Some of these importers have established sizable businesses assembling and selling ready-to-assemble cabinets shipped in flat packs aboard container ships from China (below right), going to firms like Fabuwood operating a 1 million-square-foot plant in New Jersey.
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Tim Brightbill, a trade lawyer from Wiley Rein LLP in Washington D.C. representing the U.S. cabinet industry, told Bloomberg News, “The other thing that’s notable about what’s going on is that there are a number of companies that are set up here in the U.S. specifically to assemble Chinese-manufactured cabinets.”
Importers of Chinese-made kitchen cabinets and vanities were already paying tariffs of 25 percent, and formed the American Coalition of Cabinet Distributors to seek relief, then later battled to fend off the duties, including exhibiting at KBIS, the big kitchen and bath industry show for designers and kitchen cabinet buyers.
The American Kitchen Cabinet Alliance first filed its petition against Chinese cabinet manufacturers in March 2019, documenting to the Commerce Department and U.S. International Trade Commission that Chinese producers received illegal subsidies from their government allowing them to sell cabinets at below cost of production - a practice known as "dumping." Brightbill identified a number of programs from their government supporting the Chinese cabinet industry, including discounted land, electricity, raw materials, grants, discounted loans and export incentives.
The petitioners at AKCA include Wellborn Cabinet Inc., Marsh Furniture, American Woodmark Corp. and Master WoodCraft Cabinetry, which tallied damages to the U.S. kitchen cabinet industry at $2 billion to $4 billion, and affecting some 250,000 direct and indirect jobs.
"The ITC vote is a major win for the American kitchen cabinet industry and our American workers," says Edwin Underwood, President and COO of Marsh Furniture Company, a High Point, NC cabinet manufacturer. "This is an extremely important victory for the American kitchen cabinet industry and importantly our great American manufacturing workers. When given a level playing field, the American kitchen industry can compete with anyone in the world."
In August 2019 the U.S. Department of Commerce issued its preliminary determination, estimating duties that would be charged for a list of Chinese cabinet firms that had cooperated with its investigation. These turned out to be even higher in the final ruling:
Those that failed to cooperate with the investigation will receive a 229.24 percent duty.
The action against Chinese kitchen cabinet producers follows on the heels of similar determinations made against imported flooring and against plywood from China, and a similar successful action against China's furniture manufacturers several years ago. A new initiative against imported millwork and moulding from Brazil and China is moving through a similar process, and being handled by the same law firm that led the AKCA efforts.