US Commerce preliminary countervailing duty determinations on hardwood and decorative plywood from China (81.34%), Indonesia (2.40-128.66%), and Vietnam (4.37-26.75%)

Mechanism

Commerce initiated parallel antidumping (AD) and countervailing duty (CVD) investigations into hardwood and decorative plywood from China, Indonesia, and Vietnam on 11 June 2025, covering merchandise classified under HTS subheadings 4412.10.0500 through 4412.99.5710 (varying veneer compositions and thicknesses). The CVD track — the subject of this action — reached its preliminary stage on 16 January 2026, when Commerce found countervailable subsidies in all three countries and published the determinations in the Federal Register on 22 January 2026 (case numbers C-570-212 China, C-560-845 Indonesia, C-552-852 Vietnam), triggering CBP collection of cash deposits at the preliminary rates.

Indonesia's range is the widest and highest, driven by PT Mustika Buana Sejahtera's individual rate of 128.66% after the company was found to be uncooperative during the investigation (facts-available/adverse-inference rate). China's single going-forward rate (81.34%) reflects the non-market-economy CVD methodology Commerce applies broadly to Chinese respondents. Vietnam's range (4.37%-26.75%) is materially lower, suggesting less extensive direct subsidization relative to China and Indonesia.

The CVD track runs alongside a separate AD investigation on the same product and countries, with preliminary AD margins (187.27% China, 19.98%-84.94% Indonesia, 196.14% Vietnam) announced 25 February 2026. AD and CVD cash-deposit rates stack cumulatively on the same shipments, though Commerce adjusts CVD rates for any export-subsidy component already captured in the AD margin to avoid double-counting.

Severity rationale

Severity 4 (quant basis, anchored on the 81.34% China CVD rate, with Indonesia's peak rate reaching 128.66%):

• Triple-digit subsidy offset for the top Indonesian producer and a

China-wide rate above 80% represent a severe near-prohibitive duty burden once stacked with the parallel AD case.

• Three major plywood-exporting countries are covered simultaneously,

broadening the sectoral impact across US building-materials and furniture supply chains that rely on imported hardwood plywood.

• Held at 4 rather than 5 because Vietnam's range (4.37%-26.75%) is

materially lower than China's and Indonesia's, and the determinations remain preliminary/final-but-pre-ITC-injury-ruling as of this filing, not yet permanent CVD orders.

Downstream implications

• Chinese, Indonesian, and Vietnamese plywood exporters: face

compounding AD+CVD cash-deposit burdens that in aggregate approach or exceed 200% for China and Vietnam, effectively pricing most subject merchandise out of the US market pending the ITC's final injury determination (due 4 September 2026).

• US hardwood plywood producers (e.g., domestic panel manufacturers):

substantial price support once duties are finalized and the ITC confirms injury.

• US furniture and building-materials importers: likely sourcing

shift toward non-subject-country plywood suppliers (e.g., other Southeast Asian producers not named in the petition) or domestic substitutes.

Open questions

• Whether the ITC's final injury ruling (due 4 September 2026) confirms

injury for all three countries or narrows the order's scope.

• Whether non-cooperating Indonesian producers beyond PT Mustika Buana

Sejahtera are identified before the order becomes permanent.

• Full stacked AD+CVD rate by country once both tracks reach final

orders — this action tracks the CVD side only.