US Trade Investigation Into Vietnamese Wooden Cabinets Extended Amid Scrutiny of Chinese Components

The US Department of Commerce (DOC) has again extended the timeline for its ongoing investigation into whether Vietnamese wooden cabinets are being used to circumvent US tariffs on Chinese imports.

The probe, focusing on both product scope and potential tax evasion, is prompting scrutiny of the complex supply chains in the global furniture trade.

The final conclusion on the product scope investigation is now expected on June 14, while the determination on tax evasion has been pushed back to September 26.

This represents the latest in a series of delays as the DOC seeks to unravel the origin of components found in Vietnamese-assembled cabinets.

The investigation stems from allegations by US manufacturers that Chinese-made components are being shipped to Vietnam for final assembly and subsequent export to the US.

This tactic would enable Chinese exporters to evade anti-dumping and anti-subsidy duties imposed on Chinese wooden cabinets in 2020, which range from 4.37% to a staggering 293.45%.

Sino-Vietnamese Supply Chain Under the Microscope

The probe highlights the intricacies of global manufacturing, where supply chains can span multiple countries. Suspicions center on whether the value added to Chinese components within Vietnam is sufficient for the finished cabinets to qualify as Vietnamese-origin products.

To track the flow of goods, the DOC has assigned third-country case codes to Vietnam within the US Customs and Border Protection's automated system.

It has also issued draft guidance for verifying the origin of imported cabinets, outlining procedures such as temporary suspension of liquidation and deposit requirements. Interested parties have been given until April 19 to provide comments, with a rebuttal period extending to April 26.

Potential Repercussions for Vietnam

Should the DOC's investigation uncover widespread circumvention of US tariffs, it could lead to the imposition of duties on Vietnamese-made wooden cabinets. This would represent a significant blow to Vietnam's furniture industry, which has grown rapidly in recent years, with the US as a primary export market.

The case underscores the ongoing trade tensions between the US and China, with ripple effects felt by third-party nations caught in the crossfire. It also emphasizes the need for transparent and traceable supply chains as global trade relationships become ever more intertwined.