U.S. Cabinet Makers Seek Giant Trade Case Against China Imports

(Bloomberg) -- A group representing U.S. makers of kitchen and bathroom cabinets says it has filed one of the largest trade cases ever against China, alleging at least $2 billion in harm from imports.

The American Kitchen Cabinet Alliance filed a petition with the Commerce Department and U.S. International Trade Commission, alleging Chinese producers received illegal subsidies and unfairly dumped products in the U.S., depressing prices for domestic makers, a lawyer for the group said Wednesday.

The petitioners -- which include Wellborn Cabinet Inc., American Woodmark Corp. and Master WoodCraft Cabinetry -- allege $2 billion to $4 billion in harm to the U.S. industry, which the group says accounts for about 250,000 direct and indirect jobs.

“This is a quintessential American manufacturing industry and it's right now being crushed by dumped and subsidized Chinese imports,” Tim Brightbill, a trade lawyer from Wiley Rein LLP in Washington D.C. representing the industry, said in an interview. “The other thing that's notable about what's going on is that there are a number of companies that are set up here in the U.S. specifically to assemble Chinese-manufactured cabinets.”

The petition alleges dumping margins of more than 200 percent and Brightbill estimates double-digit subsidy margins based on the number of programs supporting Chinese industry, including discounted land, electricity, raw materials, grants, discounted loans and export incentives. Stephen Wellborn of Wellborn Cabinet, which had sales of $160 million last year, said Chinese imports have been shrinking company margins for years.

“Sometimes Chinese products are half our prices, and it's one of those things that's frustrating, because you know how hard your people work,” he said in an interview. “Our people do a great job, but I look at them and tell them we can't be good enough and efficient enough to beat these numbers from China.”

Before any duties could be imposed, the petition requires the two agencies to investigate the claims and then make affirmative preliminary determinations.

--With assistance from Andrew Mayeda.

To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, James Attwood, Carlos Caminada

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