Chinese tariff increase

Section 301 Chinese Tariff Increase

On May 10, 2019, the U.S. Trade Representative, at the direction of President Trump, announced the U.S. would increase the Section 301 duties from 10% to 25% on $200B of Chinese imported products, including cabinetry, modular vanities, and cabinet components.

The U.S. Trade Representative also announced the potential of increasing the number of products subject to Section 301 duties to include “essentially all” imports from China. Additional details on which products and the timing of these potential duties have not been released.

The section 301 investigation overseen by the U.S. Trade Representative is separate from the AKCA law suit currently under review by the Department of Commerce (DOC) and International Trade Commission (ITC), alleging unfair trade practices by Chinese government and businesses. If the AKCA case receives a favorable verdict, Chinese imported cabinets could see additional duties as high as 200% levied, significantly above the current 25%.

While the Section 301 tariff is a start, it’s not enough to address the larger issue. The AKCA’s mission is to fix the problem, to allow domestic manufacturers to remain competitive, to save an iconic American Industry.

In April of this year, the ITC unanimously found a reasonable indication of material injury against U.S cabinet manufacturers under the suit brought forward by the AKCA. The DOC and ITC continue their investigations, and are expected to rule on anti-dumping and countervailing duties that range from 125% to 200% later this year. These additional duties are expected to be retroactive to March 2019, when the suit was originally filed. A finding of this magnitude would drastically impact the supply chain for projects currently sourcing cabinetry from overseas, but would level the playing field to promote fair trade and defend the $9.5B domestic cabinet industry employing more than a quarter of a million American workers.

Please don’t hesitate to reach out to your sales representative or regional sales manager if you have import business and are concerned about pricing changes or the security of your supply chain.

To find more information about the duty increase, please visit301 Tariff Investigations.