Chinese wood products manufacturers move to Vietnam to avoid US tariffs

Source:
Fordaq/VN
Views:
2153
  • text size

Wood and wooden products manufacturers in China have been imposed 25% tariffs on all exports on the US market, as it was informed by the Office of the United States Trade Representative on the 15th of June 2018. 

According to Vietnam News, due to the impacts of trade with the US, several Chinese enterprises planned to invest in Vietnam’s timber industry to take advantage of cheap labour and preferential policies.

At the end of 2016, Chinese enterprises snapped up materials from timber plantations in the Central Highlands and southeastern region of Vietnam, causing concerns over a lack of raw materials among domestic firms.

Although there are no detailed statistics, in southern Bình Dương Province where 600 enterprises are operating in the wood processing industry, one-third are from China and Taiwan.

This move is understandable as Chinese products are subject to high anti-dumping duties in the US, which spends $30 billion per year on wooden products from China.

Pressure on raw material supplies, changes in US trade policy, and an investment shift in the wood industry from China had affected and would continue to impact Vietnam, said Vifores, as quoted by Vietnam News.

Anti-dumping duties on 1300 Chinese products

At the moment, the US began collecting 25% tariffs on some 1300 products imported into the US from China valued at about US$50 billion. Analysts in China say inclusion of HS84193250, 84412000, 84413000, 84414000, 84418000, 84419000, 84209920, 84399910, 84399950 and parts of seats (94019015) and parts of seats of cane, osier, bamboo or similar materials (94019025), as well as kiln dried wood (84193210) are causing great concern.

It is said that this list might further include more consumer products, including furniture (that ranks no. 6 among the top 10 imports from China to the US).

Moreover, the US imposed the anti-dumping duties because the country spends approximately $30 billion per year on wooden products from China. Thus, the changes in the US policy, together with the pressure on raw materials supply and the investment boom from China seriously affects Vietnam’s wood industry.

China’s wood products trade with the US already on a downward trend

In March 2018, the value of the wood products trade between China and the US went 16% down, to $1.90 million. Imports from China went 5% down to $840 million, while the exports to the US declined by 23%, to $1.050 million, as reported by China’s Customs. Yet, during January-March, the value of wood products trade between the two countries increased by 9%, to $6.26 billion.

At the same time, China’s imports went 6% up, to $2.28 billion and the value of exports increased by 10%, to $3.98 billion.

China’s log imports from the US increased by 7% during January-March 2018, amounting to 1.41 million m3, while the imports of sawnwood rose 5%, to 709,600 m3. Also, the exports of fiberboard from China to the US went 11% down, to 71,200 .

Regarding the plywood exports to the US, China has been imposed countervailing duties by the US Commerce Department late last year, after various analysis showed that engineered panels were being sold at its cost below the manufacturing cost. Thus, China’s plywood exports to the US dropped 31%, to 360,000 m3 during the Q1/2018.

Post comment