U.S. Action Reported on Tariff Evasion By Chinese Cabinet, Vanity Importers

by Autumn McGarr

RESTON, VA — U.S. customs officials have acted against a cabinet importer that has allegedly evaded the antidumping and countervailing duties imposed recently on wooden cabinets, vanities and components from China, the Kitchen Cabinet Manufacturers Association has announced.

According to the KCMA, the U.S. Customs and Border Protection Agency has preliminarily determined that U.S. importer BGI Group Inc. has skirted punitive trade duties imposed by government trade officials in April 2020. Customs officials had been conducting a three-month-long investigation into the matter after KCMA’s trade counsel, the Washington, DC-based Schagrin Associates, filed an allegation of potential AD and CVD evasion under the government’s “Enforce and Protect Act.”

According to the KCMA, Customs subsequently found that BGI, which does business under the name U.S. Cabinet Depot, evaded AD/CVD duties by importing wooden cabinets and vanities that were manufactured in China but transshipped through Cambodia and falsely designated as having a country of origin of Cambodia. Customs was scheduled to issue a more detailed memorandum explaining its initial determination of evasion, the KCMA said. The agency has seven months to continue its investigation before issuing a final determination regarding potential evasion.

“This is a huge win for (the domestic cabinet) industry and the American workforce,” said Betsy Natz, CEO of the Reston, VA-based KCMA. “Our association’s mission is to make sure the strong, unified voice of our members is heard.”

According to the KCMA, which has long been fighting for the imposition of AV and CVD duties on allegedly unfairly traded imports, the imposition of duties has had “a huge beneficial impact for U.S. domestic cabinet producers,” who, despite the COVID-19 pandemic, reported a 1.2% year-to-date rise in cabinet sales through November compared to the same 11-month time period in 2019.

However, while Chinese imports have been significantly impacted by recent trade cases, there have been significant increases of U.S. imports of cabinets, vanities and components from other countries, the KCMA said. Imports from Vietnam, Malaysia and Indonesia “have increased tremendously” since the AD/CVD duties were imposed on Chinese cabinet/vanity imports, the KCMA charged. There have also been “troubling increases” from Mexico, Taiwan, Thailand, Cambodia and the Philippines, the trade association said.

“Our research continues to show that these increased imports are due to a combination of transshipment of Chinese cabinets through these countries and new production facilities popping up in these countries,” the KCMA said, adding that it has filed several new allegations with U.S. Customs and Border Protection “to alert the agency of potential evasion.”

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