American Coalition of Cabinet Distributors (ACCD), cooperation of firms of the ready-to-assemble (RTA) cabinet industry, has recently shown its disagreement regarding a trade petition. The organization has termed it as “cynical,” stating that it will disrupt the RTA sector and will hurt the jobs of thousands of workers.
ACCD’s representative, speaking at the National Press Club, urged that the alliance of traditional cabinet companies is trying to manipulate the Anti-China trade fever and pressurizing the government to impose trade duties against imported cabinets and vanities from China. The move will ultimately wipe out America’s RTA segment.
Earlier, the U.S. Commerce Department has found out, after a months-long investigation, that Chinese exporters have shipped a huge chunk of wooden cabinets and vanities at margins ranging from 4.49% to 262.18%. Afterward, U.S. Customs and Border Protection agents were ordered to collect cash deposits from all such importers based on the preliminary duty rates.
Since August, the new duties were imposed after the American Kitchen Cabinet Alliance (AKCA), a 50-member coalition of major U.S. cabinet suppliers, lodged an unreasonable trade petition. The AKCA petition, which was filed in March to the Commerce Department and the U.S. International Trade Commission (ITC), stated that the Chinese government heavily subsidizes the furniture imported from China worth $4.4 billion in 2018. It poses a threat to the $9.5 billion U.S. cabinet trade. And afterward, both the agencies are looking into the matter.
Notably, under U.S. trade laws, a domestic company can seek relief from the impact of unfair pricing of imports. The trade laws can be used to make any restriction on products in the U.S. market below the cost of production or below prices in their home markets. As per U.S. trade laws, any firms that receive unfair subsidies from their home governments, including grants, loans, tax breaks, or production inputs, are subject to countervailing duties.
The restrictions that were imposed had been applauded by the AKCA last month. However, the ACCD stated that the unfair-trade petition “threatens to damage companies and the jobs of tens of thousands of American workers employed in the RTA industry.”
The authorities of ACCD went on to add that these restrictions were imposed “despite the fact that RTA product accounts for less than 10% of the healthy and still growing U.S. cabinet market.”
Randy Goldstein, CEO of Raleigh, NC-based Kitchen Cabinet Distributors, argued that the petition is nothing but an attempt to use current political sentiment against China to favor the petitioners’ new foreign suppliers in other countries. It will “limit consumer choice in deference to the aging business model of domestic manufacturers,” he added further.
Matthew Nicely, a lawyer representing the ACCD, urged that the U.S. fair-trade laws “were simply not meant to be used to impose trade restrictions on imports that are growing their own market in the U.S.” RTA cabinets are specifically designed to satisfy consumer’s needs and have a short turnaround time compared to made-to-order cabinet companies.
According to the ACCD, besides the order issued by the Commerce Department, no duties will be collected if the ITC finds no material injury caused by these imports. The Commerce Department is expected to issue its final report and recommendation regarding the investigation on February 17 next year, while the ITC’s final jurisdiction will come out on March 30.