Hanoi, Vietnam- The Ministry of Industry and Commerce (MoIT) has announced that the United States is opening a defensive tax evasion investigation on wooden cabinets imported from Vietnam, according to published information.
The Vietnam Timber and Forest Products Association said the U.S. Department of Commerce (DoC) has notified Vietnamese authorities that it has filed a request to investigate “suspicion of trade remedy tax evasion on wooden cabinets imported from Vietnam and Malaysia, according to the EIN News Bureau report.
The DOC website does not clearly indicate whether an application has been filed. In 2020, the agency opened an investigation into Vietnamese imports.
The product offered for investigation against trade remedy tax evasion consists of wooden cabinets with HS codes 9403.40.9060, 9403.60.8081 and 8403.90.7080. The plaintiff was the American Kitchen Cabinet Alliance, representing a number of American wood cabinet manufacturers.
According to the association, the United States issued an order imposing anti-dumping and anti-subsidy taxes on the same products from China in February 2020. Since then, exports of these products from China to the United States have fallen by 54% from $2.5. billion to $1.6 billion.
Meanwhile, Vietnam’s exports of wood products to the United States increased by more than 130 percent, from $1.37 billion to $2.7 billion. At the same time, imports of these products from China to Vietnam increased from $232 million to $810 million.
According to the EIN NewsDesk, a representative from the Vietnam Wood and Forest Products Association said, “The US trading party alleges that Vietnamese companies imported parts of cabinets subject to trade tax from China and then fully assembled in Việt Nam and exported to the United States.”
He said American companies have proposed to their Department of Commerce to extend the current tax order on wooden cabinets originating in China assembled in Vietnam and exported to the United States.
The report states that the DoC found that if the product line is not extensive, the plaintiff proposes an investigation against trade remedy tax evasion with wooden cabinets imported from Vietnam.
The US Department of Commerce is expected to decide whether to open an investigation by the end of May. The association therefore recommended that timber exporters keep up to date with the procedures.
Currently, the United States is the largest import market for agricultural, forestry and fishery products from Vietnam. In the first four months of the year, exports of wood and wood products to the US market were estimated at $3.3 billion, or 68.2% of agricultural, forestry and fisheries from Việt Nam exported to this market.
According to the Trade Remedies Administration of the MoIT, during the period 2019-2021, after the United States imposed tariffs on China, imports of products under investigation from China to the United States has decreased, Vietnam’s exports to the United States have increased, and the volume of imports from China to Vietnam has increased sharply.
Regarding other wood products imported from Vietnam, the DoC announced an extension of the deadline to issue the final conclusion on the anti-dumping and anti-subsidy tax evasion investigation of hardwood plywood from Vietnam. Accordingly, the DOC is expected to issue its final finding on October 17, 2022, instead of April 20, 2022, as previously announced. This is the third renewal of this content by the DOC.
The case was initiated by the DOC to investigate on June 17, 2020, at the request of the US Customs Service (CBP) with two contents on scope investigation and anti-circumvention.
As part of the scope investigation, the DoC will continue the investigation to determine whether hardwood plywood imported from Vietnam to the United States was among the products subject to tariffs, taking into consideration five factors, including: the level of investment of manufacturing and export enterprises, the level of investment in research and product. development, the manufacturing process in Việt Nam, the size of the production facilities in Việt Nam and the value-added part of the product produced in Việt Nam.
The purpose of a US-led anti-circumvention investigation was to ensure the effective enforcement of trade remedy measures applied to Chinese products.