DHA eNews - COVID Lockdowns Deal Blow To Vietnam's Timber & Furniture Industries
After three months of severe pandemic-related lockdowns in Vietnam, some furniture companies are moving production back to China. Vietnam's government ordered all factories to shut down after a June outbreak of COVID, only allowing them to reopen if workers were housed on-site. About 50% of timber processing companies in Vietnam were forced to stop operations and are now facing the possibility of bankruptcy. Others are still allowed to operate but are at less than 50% of capacity.
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The hot streak of U.S. imports of hardwood flooring ended in July. Imports from China and Brazil fell 18% in July as imports dropped from yearly highs in June. The pace of imports from China has declined to 19% growth year-to-date.
After noticing a spike of more than 1,000% in cabinet imports from Vietnam, Malaysia, and Indonesia, MasterBrand Cabinets hired outside investigators. The documentation they provided to U.S. Customs suggested that wooden cabinets and vanities produced in China are being repackaged in Malaysia and then shipped to the U.S., and that importers misrepresented the products as made in Malaysia rather than in China.
The U.S. Court of International Trade remanded this case for the fourth time, directing the U.S. Department of Commerce to reconsider the rate applied to the separate rate companies in the hardwood plywood case. Commerce had continued to calculate a rate of 57.36% for the separate rate companies and identified additional information on the record to support its determination.
Importantly, the Court agreed with Commerce's arguments that the 0% margin calculated for Chengen should not be used for the separate rate companies. The rate ultimately calculated will apply to a relatively limited number of entries.
AHEC reports that Chinese tariff exemptions, originally set to expire on September 17, have been extended until April 16, 2022. The tariffs apply to both hardwood logs and lumber products exported to China.
U.S. hardwood exports to Greater China and Southeast Asia are sustaining a recovery through 2021. The latest data for this year shows that the value of U.S. hardwood log exports to Greater China is $327 million, up 35% from 2020. U.S. exports of hardwood lumber have reached $479 million, up 1.7%.
Recent updates about the impact on our industry include:
- Global timber supply chains may be hit hard by the Delta variant
- Study fails to find a link between increased deforestation and COVID lockdowns
- COVID hits wildfire fighters even harder than last year
- A little coronavirus humor
See the DHA coronavirus news and resources pages for more stories and information.
Download the 2021 Decorative Hardwoods Association Where to Buy membership directory to find reputable suppliers of hardwood plywood, veneer, engineered wood flooring, machinery, and more. Get your copy today!
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