Wood Mouldings and Millwork Products From the People's Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value

AGENCY:

Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

The Department of Commerce (Commerce) determines that imports of wood mouldings and millwork products (millwork products) from the People's Republic of China (China) are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is July 1, 2019 through December 31, 2019.

DATES:

Applicable January 4, 2021.

FOR FURTHER INFORMATION CONTACT:

Brian Smith or Michael Bowen, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1766 or (202) 482-0768, respectively.

SUPPLEMENTARY INFORMATION:

Background

On August 12, 2020, Commerce published the Preliminary Determination in the LTFV investigation of millwork products from China. For a complete description of the events that followed the Preliminary Determination, see the Issues and Decision Memorandum.

Scope of the Investigation

The products covered by this investigation are millwork products from China. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

On August 5, 2020, we issued a Preliminary Scope Memorandum. Several interested parties submitted case and rebuttal briefs concerning the scope of this investigation. For a summary of the product coverage comments and rebuttal comments submitted to the record for this final determination, and accompanying discussion and analysis of all comments timely received, see the Final Scope Memorandum. Based on the comments received from interested parties, we are revising the scope of this investigation as it appeared in the Preliminary Determination. The scope in Appendix I reflects these changes.

Verification

Commerce normally verifies information relied upon in making its final determination, pursuant to section 782(i)(1) of the Tariff Act of 1930, as amended (the Act). However, during the course of this investigation, Commerce was unable to conduct on-site verification due to travel restrictions. Consistent with section 776(a)(2)(D) of the Act, Commerce relied on the information submitted on the record, where appropriate, which we used in making our Preliminary Determination, as facts available in making our final determination.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs that were submitted by parties in this investigation are addressed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum, see Appendix II to this notice. The Issues and Decision Memorandum is a public document and is made available to the public via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at https://enforcement.trade.gov/frn/index.html. The signed and electronic versions of the Issues and Decision Memorandum are identical in content.

China-Wide Entity and Use of Adverse Facts Available

Commerce continues to find that the use of facts available is warranted in determining the rate of the China-wide entity pursuant to sections 776(a)(1) and (a)(2)(A)-(C) of the Act. As discussed in the Issues and Decision Memorandum, Commerce finds that the use of facts available is also warranted with respect to Bel Trade Wood Industrial Co., Ltd. Youxi Fujian (Bel Trade) pursuant to sections 776(a)(1) and (a)(2)(A)-(C) of the Act. Furthermore, we find that the use of adverse facts available (AFA) is warranted because the China-wide entity, including Bel Trade, did not cooperate to the best of its ability to comply with our requests for information and, accordingly, we applied adverse inferences in selecting from the facts available, pursuant to section 776(b) of the Act and 19 CFR 351.308(a). For the final determination, as AFA, we are assigning the China-wide entity, including Bel Trade, the rate of 230.36 percent, which is the highest calculated transaction-specific margin on the record.

Separate Rates

We preliminarily granted 43 companies, including the two mandatory respondents, Fujian Yinfeng Imp & Exp Trading Co., Ltd./Fujian Province Youxi City Mangrove Wood Machining Co., Ltd. (Yinfeng/Mangrove) and Bel Trade, and 41 non-individually examined respondents, a separate rate in the Preliminary Determination based on their eligibility. As discussed in the Issues and Decision Memorandum, we continue to find that Yinfeng/Mangrove is eligible for a separate rate in the final determination. Because we find that AFA is warranted for Bel Trade in the final determination, it is no longer eligible for a separate rate and is considered part of the China-wide entity.

No party commented on our preliminary separate rate determinations with respect to the 41 non-individually examined companies; thus, there is no basis to reconsider our preliminary determinations with respect to these companies, and we have continued to grant them a separate rate in this final determination. Finally, with respect to Lanzhou Xinyoulian Industrial Co., Ltd. (Lanzhou Xinyoulian), a company to which we preliminarily denied a separate rate, we find Lanzhou Xinyoulian is also entitled to a separate rate after careful consideration of its timely submitted information requested after the Preliminary Determination.

In determining the rate for non-individually examined separate rate respondents in a non-market economy antidumping duty (AD) investigation, Commerce normally takes guidance from section 735(c)(5)(A) of the Act, which governs the calculation of the all-others rate in a market economy AD investigation. Generally, under section 735(c)(5)(A) of the Act, this rate shall be an amount equal to the weighted average of the estimated AD rates established for those companies individually examined, excluding any zero and de minimis rates and any rates based entirely under section 776 of the Act.

The sole calculated AD rate for this final determination is the margin calculated for Yinfeng/Mangrove. Therefore, for the final determination, we assigned the rate calculated for Yinfeng/Mangrove as the separate rate for the non-individually examined companies which established their eligibility for a separate rate, consistent with our practice.

Changes Since the Preliminary Determination

Based on our review and analysis of the comments received from interested parties, we made changes to the margin calculations for Yinfeng/Mangrove. As a result of these changes, Commerce also revised the China-wide entity rate and the rate for those companies entitled to a separate rate. For a discussion of these changes, see the Issues and Decision Memorandum.

Combination Rates

Consistent with the Preliminary Determination and Policy Bulletin 05.1, Commerce calculated combination rates for the respondents that are eligible for a separate rate in this investigation.

Final Determination

Commerce determines that the following weighted-average dumping margins exist for the companies under investigation:

Disclosure

We intend to disclose to parties in this proceeding the calculations performed for this final determination within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of millwork products from China, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after August 12, 2020, the date of publication in the Federal Register of the affirmative Preliminary Determination.

Pursuant to section 735(c)(1)(B)(ii) of the Act, upon the publication of this notice, Commerce will instruct CBP to require a cash deposit equal to the weighted-average amount by which the normal value exceeds U.S. price as follows: (1) The cash deposit rate for the exporter/producer combinations listed in the table above will be the rate identified in the table; (2) for all combinations of Chinese exporters/producers of subject merchandise that have not received their own separate rate above, the cash deposit rate will be the cash deposit rate established for the China-wide entity; and (3) for all non-Chinese exporters of subject merchandise which have not received their own separate rate above, the cash deposit rate will be the cash deposit rate applicable to the Chinese exporter/producer combination that supplied that non-Chinese exporter. These suspension of liquidation instructions will remain in effect until further notice.

To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of domestic subsidy pass-through and export subsidies determined in a companion countervailing duty (CVD) proceeding where appropriate. Accordingly, because Commerce made a final affirmative determination for export subsidies in the companion CVD investigation, we offset the calculated estimated weighted-average dumping margins by the appropriate export subsidy rates as indicated in the above chart. However, suspension of liquidation for provisional measures in the companion CVD case has been discontinued effective October 10, 2020; therefore, we are not instructing CBP to collect cash deposits based upon the adjusted estimated weighted-average dumping margin for those export subsidies at this time.

For this final determination, we made no adjustment for domestic subsidy pass-through because we found no basis upon which to make such an adjustment.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of our final affirmative determination of sales at LTFV. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. Because the final determination in this proceeding is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of subject merchandise from China no later than 45 days after our final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated, and all cash deposits posted will be refunded. If the ITC determines that such injury does exist, Commerce will issue an AD order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding Administrative Protective Orders

This notice will serve as a reminder to the parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

Notification to Interested Parties

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c).

Appendix I—Scope of the Investigation

The merchandise subject to this investigation consists of wood mouldings and millwork products that are made of wood (regardless of wood species), bamboo, laminated veneer lumber (LVL), or of wood and composite materials (where the composite materials make up less than 50 percent of the total merchandise), and which are continuously shaped wood or finger-jointed or edge-glued moulding or millwork blanks (whether or not resawn). The merchandise subject to this investigation can be continuously shaped along any of its edges, ends, or faces.

The percentage of composite materials contained in a wood moulding or millwork product is measured by length, except when the composite material is a coating or cladding. Wood mouldings and millwork products that are coated or clad, even along their entire length, with a composite material, but that are otherwise comprised of wood, LVL, or wood and composite materials (where the non-coating composite materials make up 50 percent or less of the total merchandise) are covered by the scope.

The merchandise subject to this investigation consists of wood, LVL, bamboo, or a combination of wood and composite materials that is continuously shaped throughout its length (with the exception of any endwork/dados), profiled wood having a repetitive design in relief, similar milled wood architectural accessories, such as rosettes and plinth blocks, and finger-jointed or edge-glued moulding or millwork blanks (whether or not resawn). The scope includes continuously shaped wood in the forms of dowels, building components such as interior paneling and jamb parts, and door components such as rails, stiles, interior and exterior door frames or jambs (including split, flat, stop applied, single- or double-rabbeted), frame or jamb kits, and packaged door frame trim or casing sets, whether or not the door components are imported as part of a door kit or set.

The covered products may be solid wood, laminated, finger-jointed, edge-glued, face-glued, or otherwise joined in the production or remanufacturing process and are covered by the scope whether imported raw, coated (e.g., gesso, polymer, or plastic), primed, painted, stained, wrapped (paper or vinyl overlay), any combination of the aforementioned surface coatings, treated, or which incorporate rot-resistant elements (whether wood or composite). The covered products are covered by the scope whether or not any surface coating(s) or covers obscure the grain, textures, or markings of the wood, whether or not they are ready for use or require final machining (e.g., endwork/dado, hinge/strike machining, weatherstrip or application thereof, mitre) or packaging.

All wood mouldings and millwork products are included within the scope even if they are trimmed; cut-to-size; notched; punched; drilled; or have undergone other forms of minor processing.

Subject merchandise also includes wood mouldings and millwork products that have been further processed in a third country, including but not limited to trimming, cutting, notching, punching, drilling, coating, or any other processing that would not otherwise remove the merchandise from the scope of this investigation if performed in the country of manufacture of the in-scope product.

Excluded from the scope of this investigation are countertop/butcherblocks imported as a full countertop/butcherblock panel, exterior fencing, exterior decking and exterior siding products (including solid wood siding, non-wood siding (e.g., composite or cement), and shingles) that are not LVL or finger jointed; finished and unfinished doors; flooring; parts of stair steps (including newel posts, balusters, easing, gooseneck, risers, treads, rail fittings and stair stringers); picture frame components three feet and under in individual lengths; and lumber whether solid, finger-jointed, or edge-glued. To be excluded from the scope, finger-jointed or edge-glued lumber must have a nominal thickness of 1.5 inches or greater and a certification stamp from an American Lumber Standard Committee-certified grading agency. The exclusion for lumber whether solid, finger-jointed, or edge-glued does not apply to screen/“surfaced on 4 sides” (S4S) and/or “surface 1 side, 2 edges” (SlS2E) stock (also called boards) that are finger-jointed and/or edge-glued, or to finger-jointed and/or edge-glued moulding or millwork blanks (whether or not resawn). Accordingly, S4S and S1S2E stock/boards that are not finger-jointed or edge-glued are excluded from the scope of this investigation.

Excluded from the scope of this investigation are all products covered by the scope of the antidumping duty order on Hardwood Plywood from the People's Republic of China. See Certain Hardwood Plywood Products from the People's Republic of China: Amended Final Determination of Sales at Less Than Fair Value, and Antidumping Duty Order, 83 FR 504 (January 4, 2018).

Excluded from the scope of this investigation are all products covered by the scope of the antidumping duty order on Multilayered Wood Flooring from the People's Republic of China. See Multilayered Wood Flooring from the People's Republic of China: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 76 FR 76690 (December 8, 2011).

Excluded from the scope of this investigation are all products covered by the scope of the antidumping duty order on Wooden Cabinets and Vanities from the People's Republic of China. See Wooden Cabinets and Vanities and Components Thereof from the People's Republic of China: Antidumping Duty Order, 85 FR 22126 (April 21, 2020).

Excluded from the scope of this investigation are all products covered by the scope of the antidumping duty order on Wooden Bedroom Furniture from the People's Republic of China. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture from the People's Republic of China, 70 FR 329 (January 4, 2005).

Imports of wood mouldings and millwork products are primarily entered under the following Harmonized Tariff Schedule of the United States (HTSUS) numbers: 4409.10.4010, 4409.10.4090, 4409.10.4500, 4409.10.5000, 4409.22.4000, 4409.22.5000,4409.29.4100, and 4409.29.5100. Imports of wood mouldings and millwork products may also enter under HTSUS numbers: 4409.10.6000,4409.10.6500, 4409.22.6000, 4409.22.6500, 4409.29.6100, 4409.29.6600, 4418.20.4000, 4418.20.8030, 4418.20.8060, 4418.99.9095 and 4421.99.9780. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.

Appendix II—List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Application of Facts Available and Use of Adverse Inference

IV. China-Wide Rate

V. Separate Rates

VI. Adjustments for Countervailable Export Subsidies

VII. Changes From the Preliminary Determination

VIII. Discussion of the Issues

Comment 1: Whether to Deny Yinfeng/Mangrove a Separate Rate

Comment 2: Whether to Deny Wuxi Boda a Separate Rate

Comment 3: Primary Surrogate Country Selection

Comment 4: Surrogate Value Selection for Laminated Veneer Lumber/Plywood/Tray Material Inputs

Comment 5: Domestic Subsidy Offset

IX. Recommendation