U.S. Hardwood Mfgrs Petition Chinese Imports

Washington, DC, Oct. 21, 2010 -- U.S. engineered hardwood flooring manufacturers have charged China with unfair trade practices by dumping products in this country and they are calling for an investigation by the U.S. government as well as duties on Chinese imports.

The Coalition for American Hardwood Parity (CAHP), an association of U.S. manufacturers of engineered wood flooring, said it has filed an unfair trade petition with the U.S. Department of Commerce and the International Trade Commission, asserting that Chinese manufacturers have gained an unfair competitive advantage as a result of the dumping of products.

The petition claims that U.S. manufacturers have suffered "material competitive injury," and that the industry continues to be threatened. In addition to an investigation, it seeks duties on imports to make the market more competitive.

The petition asks for an investigation by the U.S. government and provided documentation that Chinese imports have an unfair advantage in the marketplace.

Over the last several years, the market share of U.S. multilayered wood flooring captured by manufacturers in China has grown from single digits to over one-third of the market, the group said.

According to CAHP counsel and spokesperson, Jeff Levin, the market share growth of China has not been earned on a "level playing field" as China does not abide by the same rules as U.S. manufacturers.

"China has dumped products into the U.S. market at prices that are well below fair value," said Levin.

"Furthermore, Chinese manufacturers receive an array of government subsidies, including that country’s manipulation of currency exchange rates. All of these factors equate to an enormous unfair advantage for Chinese manufacturers, and injure the entire domestic hardwood flooring industry."

"Even more ominously, these unfair trade practices present a fundamental, if not insurmountable, obstacle to the domestic industry’s ability to recover its competitive footing, even when underlying economic conditions in this country turn more favorable."

In addition to U.S. manufacturers, other stakeholders such as flooring retailers and consumers have been hurt by Chinese imports, the group said.

“The profit margins for distributors and specialty retailers have continually diminished," Levin said.

"Beautiful, well-styled domestic products that once earned a reasonable profit have been relegated to commodity status as Chinese companies simply appropriate the costly development and market-testing efforts of domestic manufacturers. In addition, service levels have suffered throughout the supply chain. In the end, everyone throughout U.S. commercial channels, up to and including the consumer, ultimately suffers."

The CAHP petition has the support of domestic multilayered wood flooring manufacturers that together represent a majority of domestic hardwood flooring production.

In line with regulatory timelines, CAHP expects a preliminary ruling and escrow deposit requirement to be implemented by winter 2011 and a final ruling and duty to be implemented by end of 2011.