U.S. DOC determines anti-dumping taxes on China-made wooden furniture

Taipei, Nov. 15, 2004 (CENS)--The U.S. Department of Commerce (DOC) finally ruled to impose an average anti-dumping tax rate of 8.64% on mainland China-made wooden furniture, 2.28 percentage points lower than the initial ruling issued in June this year.

It is expected the U.S. will begin levying the punitive tariffs on imported wooden furniture from the mainland based on the final verdict, starting from the end of this year or the beginning of next year.

Despite the lowered punitive tariff, it has dealt a heavy blow to mainland China's wooden furniture industry. A Taiwanese furniture manufacturer with production facility in the mainland estimated the mainland's furniture industry would suffer a minimum loss of US$400 million because of the imposition of the anti-dumping taxes. But Vietnam will benefit from the event as an additional 44 production lines of wooden furniture have been erected there over the past year.

The U.S. DOC's final verdict showed seven firms under mandatory investigations have succeeded in vying for lower tariffs while some others have to bear higher ones. For instance, Tech Lane International Ltd. And Lacquer Craft Mfg. Co. saw their anti-dumping tariffs set at 198.08% and 6.95%, respectively, higher than the 9.36% and 4.9% set at the initial ruling. Tech Lane and Lacquer Craft are invested in by Taiwan's Kee Jia Wood Co. and Hamson International Enterprises Co., respectively.

Lacquer president Kuo Shan-hui said the outcome of the final verdict is acceptable because it will give room for the mainland's furniture industry to survive. But he also noted Vietnam would become mainland China's strongest rival as many Taiwanese-invested furniture makers have increased production lines in that nation.

Over the past one year, many manufacturers of wooden furniture in the mainland have lost many orders because of the threat of the punitive tariff imposition. To cushion the impact of the high punitive tariff imposed by the U.S. DOC, Tech Lane has set up a new plant in Vietnam.

Overshadowed by the imposition of the punitive tariff, exports of wooden furniture made in Guangdong Province, the manufacturing center of such product in the mainland, have been sliding since June last year when the preliminary verdict was made. Wooden furniture exported from Guangdong to the U.S. fell 42.3% in August from April.

Kuo predicted the impact of the punitive tariff on mainland furniture makers would emerge in two or three years from now on. At that time, Kuo said, Vietnam will become a strongest competitor against mainland as a solid production chain in Vietnam will be established.