Myth: Imported hardwood plywood is taking business away from American domestic hardwood plywood producers.
Fact: Imported hardwood plywood is a much different product than that which is available from America’s domestic hardwood plywood producers.
Hardwood plywood imported from China is a unique product used by hundreds of U.S. manufacturers that produce furniture and cabinetry, componentry for marine, aircraft, recreational vehicles and hundreds of other products that are painted or laminated.
Imported Chinese hardwood plywood is substantially different from the decorative hardwood plywood produced domestically in several ways. First, it is made from fast growing, short rotation hardwoods that can be harvested in as few as six years. These imported panels are stronger and lighter in weight and are typically used for paint grade and lamination grade applications. This is in contrast to domestic decorative hardwood plywood, which is typically produced with longer rotation softwood cores and decorative face veneers such as Red Oak, Maple and Cherry, available only in the North America, and are traditionally used for stain grade and exposed finishing applications.
Domestic hardwood plywood producers have acknowledged that there is a role for both domestic and imported hardwood plywood in the US market.
According to a recent blog post by petitioner Timber Products Vice President, Roger Rutan, “Offering customers hardwood plywood from China has been a major part of our import division for many years. While Timber Products has three hardwood plywood mills in the U.S., we learned long ago that Chinese hardwood plywood filled some customer’s needs at a different level than we produce domestically.”
Myth: Chinese manufacturers use raw materials that come from suspect or illicit sources.
Fact: Hardwood plywood imported from China relies on short rotation fiber from sustainably managed and harvested plantations planted specifically for the purpose of providing a fiber supply for these products.
Chinese manufacturers use fiber from hardwood plantations managed by China’s Provincial Timber Bureau. These plantations are replanted with short rotation hybrid species that helps ensure the availability of fiber for future needs. By following such internationally recognized forest management protocol, China is improving its fiber efficiency and reducing its reliance on native forests.
According to Murdoch University’s Professor Bernard Dell, “In the past two decades I have witnessed the tremendous change in the forest landscape in southern China… There are now nearly 2.5 million hectares of eucalypt plantations in China.” As a result of these efforts China has the largest total area of forest plantations in the world with 31.4 million hectares of forest plantations (Ecosystem Goods and Services from Plantation Forests). These advancements should be commended, not criticized.
Myth: A tariff on hardwood plywood imported from China would protect the U.S. economy and U.S. jobs.
Fact: The proposed tariffs would hurt the U.S. economy by dealing an additional blow to an already struggling US economy.
Over one thousand U.S. companies, most of which are small businesses, rely on the importation of engineered hardwood plywood panels to be competitive in the global marketplace. The approval of this tariff would severely jeopardize these companies and the tens of thousands of U.S. jobs they support.
If the petitioners are successful in eliminating 50% of the hardwood plywood supply to the U.S. market in 2013, it is the customers that will face pricing increases and material shortages. This will ultimately impact their ability to compete with offshore manufacturing, shifting the balance of our cabinet industry to jobs outsourced to other countries still able to access the global supply chain.
“Inflexible rules… don’t work because they are not compatible with how businesses operate in the 21st Century. Without a more flexible approach, these rules will continue their record of failure in promoting new trade and investment, and will end up being a barrier to both U.S. imports and exports.” – NRF President and CEO Matthew Shay
Myth: A tariff on hardwood plywood imported from China would protect U.S. jobs.
Fact: The proposed tariffs would eliminate U.S. jobs.
According to a recent study for the National Retail Federation, imposing just a 27.5 percent tariff on imports from China “would cost nearly 300,000 net U.S. jobs.” Domestic hardwood plywood producers are demanding a tariff of 300%, or more than 10 times that level.
According to the National Retail Federation, eight U.S. jobs owe their existence to imports from China for every one job that is “lost” to those imports.
If the 300% tariff being petitioned by the Coalition of Fair Trade of Hardwood Plywood is approved, up to half the world’s supply of hardwood plywood would be unavailable to U.S. manufacturers, creating an economic advantage for overseas producers of many finished products manufactured in the U.S.
Myth: China has increased their market share in the U.S. to above 50 percent, taking business away from domestic producers.
Fact: China’s share of the U.S. market has increased due to a reduction in U.S. imports from such countries as Korea, Taiwan, Malaysia, Indonesia, and the Philippines.
China’s share of the U.S. hardwood plywood market has grown in the past decade, not because of “unfair trade practices”, but due to their investments in building sustainable fiber resources and their willingness to work with international companies in producing a product that meets the strict environmental and manufacturing specifications required.
Other countries that had been leading importers of hardwood plywood into the U.S. for decades saw their percentage of the import market either reduce drastically, or completely end, as the availability of their natural resources declined and the environmental requirements (CARB) became stricter. According to a forestry outlook study by the United Nations in 2009 the Philippines, once a large exporter of veneer and plywood in the 1980s, became a net importer of logs in 2005 due in part to the destruction of their forests between 1934 and 2000 and the demand for wood as an energy source.
While China has enjoyed an increased share of the hardwood plywood import, the total amount of hardwood plywood imported into the U.S. has not changed significantly. China’s market share has grown, not due to displacement of U.S. producers, but by the shifting of production between international suppliers.