1. Executive Summary
The US Department of Commerce (DOC) and International Trade Commission (ITC) are investigating alleged dumping and unfair subsidies (AD/CVD) on birch plywood imports from Vietnam and Indonesia.
Preliminary CVD rates (expected): Vietnam 6–10%, Indonesia 8–15%.
Final AD margins (predicted): Vietnam 15–30%, Indonesia 10–25%.
If duties are imposed, US importers and Asian supply chains will face significant disruption.
2. Current Supply Chain & Key Asian Producers
- Vietnam: Major exporters include Scansia Pacific, VRG Dongwha, Wanek Plywood.
Indonesia: Key players are Korindo Group, Kayu Lapis Indonesia, Sumatraco Group. - These factories heavily rely on US exports (30–50% of output).
- Supply chain: Indonesian/Vietnamese birch veneer → plywood manufacturing → US distributors/retailers.
Some Vietnamese production uses Russian birch, raising “circumvention” concerns.
3. Predictions & Analysis
Scenario 1: US Ruling Unfavorable to Vietnam & Indonesia (High Duties Imposed)
- Immediate impact:
- US importers will shift sourcing to alternative countries (Thailand, Malaysia, China, or EU).
- Vietnamese/Indonesian factories will lose 30–50% of US orders.
- Asian producer reactions:
- Price cuts in non-US markets (Asia, Middle East) to offload surplus.
- Diversification into other products (e.g., MDF, furniture).
- Investment in third-country processing (e.g., Cambodia, Laos) to avoid duties.
- Legal challenges via WTO or US courts.
- US importer reactions:
- Cost increases of 15–30% passed to consumers.
- Seeking tariff exemptions if possible; renegotiating contracts.
Scenario 2: US Ruling Favorable to Vietnam & Indonesia (Low/No Duties)
- Immediate impact:
- Increased export volumes to the US; potential price drops due to competition.
- Supply chain stability maintained; US importers expand orders.
- Asian producer reactions:
- Accelerated expansion of birch plywood capacity.
- Investment in veneer drying/processing to reduce material costs.
- Long-term contracts with US buyers to lock in market share.
- US importer reactions:
- Stockpiling in anticipation of future trade actions.
- Strengthening partnerships with Vietnamese/Indonesian mills.
4. Key Numbers & Rates
- Current US imports: ~$1.2 billion annually from Vietnam and Indonesia combined.
- Predicted duties (if imposed):
- Vietnam: CVD 6–10% + AD 15–30% = total 21–40%.
- Indonesia: CVD 8–15% + AD 10–25% = total 18–40%.
- Expected US price increase: 15–25% for birch plywood.
- Shift to alternative suppliers: Thailand/Malaysia could gain $300–500 million in US exports.
5. Recommendations for US Importers
- Diversify supply chains now—explore Thailand, Malaysia, or European sources.
- Monitor DOC/ITC rulings closely; apply for exclusion if possible.
- Revisit contracts with Asian suppliers to include duty-risk clauses.
- Consider stockpiling pre-duty if cash flow allows.
6. Conclusion
The US AD/CVD ruling will reshape the birch plywood supply chain.
- Unfavorable outcome: Severe disruption; shift to alternative countries.
- Favorable outcome: Consolidation of Vietnam/Indonesia as top US suppliers.
US importers should prepare for both scenarios to mitigate risk.
