Commerce finds Chinese paper plate makers routed production through Cambodia and Malaysia to evade duties of up to 515.40 percent, orders cash deposits reaching back to August 2025 and puts a fast-growing transshipment playbook on notice.
By the US Trade Desk, Peacock Tariff Consulting
WASHINGTON, July 13, 2026
The United States has slammed shut one of the more brazen escape routes in its trade enforcement system. In twin notices published Friday in the Federal Register, the Commerce Department preliminarily determined that paper plates finished in Cambodia and Malaysia using Chinese-made paperboard are circumventing the antidumping and countervailing duty orders on paper plates from China, and it directed US Customs and Border Protection to begin collecting cash deposits at rates that reach 515.40 percent, retroactive to entries made as far back as August 22, 2025.
The determinations, issued under section 781(b) of the Tariff Act of 1930 and applicable as of July 10, are country-wide, meaning they cover every producer and exporter of paper plates in both countries rather than only the companies Commerce individually examined. That breadth matters. It converts what began as a complaint about a handful of factories into a blanket presumption that any paper plate shipped from Cambodia or Malaysia is, unless proven otherwise, a Chinese plate wearing a borrowed flag, and should be charged Chinese duties accordingly.
The product at issue is about as ordinary as commerce gets. The orders cover certain paper plates up to two inches deep, whether plain, white, colored or printed, made from paperboard of nearly any fiber, from bamboo and bagasse to conventional pulp. The category spans everything from bulk white picnic plates sold by the hundred to the printed party tableware stocked in supermarket seasonal aisles. It is a high-volume, low-margin business in which a duty measured in multiples of the invoice price is not a cost increase but a commercial death sentence.
The legal test Commerce applied is a familiar one to trade practitioners but obscure to almost everyone else. Section 781(b) allows the agency to sweep third-country merchandise into an existing order when goods of the same class are completed or assembled abroad from components subject to the order, when that completion or assembly is minor or insignificant, when the value of the covered Chinese input represents a significant portion of the finished product’s value, and when extending the order is appropriate to prevent evasion. Pressing flat Chinese paperboard into a formed plate, Commerce preliminarily concluded, is exactly the kind of minor finishing step the statute was written to catch.
Under Friday’s instructions, importers whose entries lack the required certifications face cash deposits at the China-wide antidumping rate of 515.40 percent, plus countervailing duty deposits at the all-others rate of 10.61 percent, according to the Cambodia notice. Companies that hold their own company-specific rates under the underlying China orders will be charged those rates instead. Across the two orders, according to the Global Trade Alert database’s summary of the measures, the applicable antidumping rates run from 267.63 percent to 515.40 percent and the countervailing rates from 4.47 percent to 295.08 percent, depending on the company.
The financial exposure does not begin with Friday’s publication. Commerce instructed CBP to suspend liquidation of all unliquidated entries of paper plates from Cambodia and Malaysia entered on or after August 22, 2025, the date the circumvention inquiries were formally initiated. Importers who brought in plates during the intervening ten and a half months must now file post-summary corrections converting those shipments from ordinary consumption entries to entries subject to antidumping and countervailing duties, reporting them under new third-country case numbers. For goods that entered duty-light last autumn, the bill is arriving this summer.
The story of how a disposable plate became the subject of a federal enforcement action stretches back two and a half years. In January 2024, the American Paper Plate Coalition, a group of US producers, petitioned Commerce for relief from dumped and subsidized imports. After five investigations, Commerce imposed antidumping and countervailing duty orders on paper plates from China, Thailand and Vietnam on March 20, 2025. The China-wide antidumping rate was set at 515.40 percent, a figure built on adverse inferences after Chinese exporters declined to cooperate fully with the investigation.
According to the coalition, the evasion began almost immediately. Within weeks of Commerce opening the original investigations, Chinese companies began moving paper plate finishing operations to Cambodia and Malaysia, the group said in announcing its circumvention requests. On July 8, 2025, the coalition’s Anticircumvention Working Group formally asked Commerce to investigate, submitting what it described as extensive evidence of circumvention, including public statements by Malaysian and Cambodian companies admitting that they had moved production out of China to escape the duties.
“Chinese companies are intentionally circumventing the United States trade laws to gain an unfair advantage in the marketplace,” Robert Epstein, president and chief executive of coalition member AJM Packaging Corporation, said when the requests were filed. “Commerce already conducted five investigations and found that Chinese, Vietnamese, and Thai companies were dumping subsidized paper plates in the U.S. market. Yet here we are, just months after the cases were completed, forced to ask for circumvention investigations because Chinese companies are once again skirting the rules and exposing importers to duties that can be applied retroactively.”
Commerce agreed the evidence was sufficient, and then some. When it initiated the inquiries on August 22, 2025, it did so on a country-wide basis, finding the record strong enough to justify examining all producers and exporters in both countries rather than named companies alone, and it expressly left open the possibility of retroactive duties. Adam H. Gordon of The Bristol Group PLLC, counsel to the coalition, said at the time that the group would be “actively involved at every step of this process” and would “seek the retroactive application of duties on all entities found circumventing.”
Gordon had earlier characterized the scheme in blunt terms. Chinese companies, he said, were “deliberately shifting finishing operations to Cambodia and Malaysia in a transparent attempt to sidestep U.S. trade laws” and to undercut American businesses. The coalition’s working group comprises five US producers: AJM Packaging Corporation of Bloomfield Hills, Michigan; Aspen Products of Kansas City, Missouri; Dart Container Corporation of Mason, Michigan; Hoffmaster Group of Oshkosh, Wisconsin; and Unique Industries of Philadelphia.
The investigation itself was anything but smooth. Commerce selected two Cambodian mandatory respondents, Cherish Industrial (Cambodia) Co. and Namper Packaging (Cambodia) Co., in September 2025, but could not even deliver its initial questionnaire to Namper Packaging, according to the Federal Register notice. A third respondent, Hengrong International (Cambodia), was added in February 2026. The preliminary decision memorandum indicates Commerce relied in part on facts available with adverse inferences, the standard consequence when companies under investigation fail to respond.
The calendar slipped repeatedly. The federal government shutdown last autumn forced Commerce to toll all deadlines in its administrative proceedings by 47 days in mid-November, and a backlog of electronically filed documents added another 21 days a week later. Three further extensions followed, pushing the preliminary determination from March 30 to late June. The decision was finally signed on July 6 by Christian L. Bush, deputy assistant secretary for policy and negotiations, and published four days later. Specialist outlets MLex and Law360 reported the determination when the notices surfaced late last week.
For importers, the most consequential feature of Friday’s action may be the certification regime, and specifically who cannot use it. Commerce established importer and exporter certifications that would, in principle, allow parties to attest that specific entries are not made with Chinese-origin paperboard, or are made with an input other than paperboard, and thereby avoid the cash deposits. But the agency simultaneously determined that Cambodian producers and exporters are not currently eligible to participate in the certification program at all.
The practical effect is sweeping. Because the exporter certification is a required element, the ineligibility of every Cambodian producer and exporter means that, for now, essentially all paper plates from Cambodia will be treated as Chinese merchandise and charged deposits at Chinese rates, regardless of where the paperboard was actually made. A company that believes it runs a legitimate, Chinese-input-free operation must earn its way into the program by requesting a certification review within a future administrative review, a process that involves verification and can take a year or more.
Even where certifications are permitted, the compliance burden is heavy. For entries made between August 22, 2025 and July 10, 2026 that remain unliquidated, certifications must be completed and uploaded to CBP’s systems no later than August 7, 2026. Importers must retain certifications and supporting documentation, including mill test reports and production records tracing the origin of the paperboard, for at least five years. Customs brokers are expressly barred from certifying on an importer’s behalf, and the certification forms remind signatories that false statements carry criminal penalties under 18 U.S.C. 1001.
The Malaysia determination, published the same day as a companion notice, runs on a parallel track. According to the Global Trade Alert database, Commerce provisionally extended both the antidumping and countervailing duty orders on Chinese paper plates to merchandise finished in Malaysia with Chinese paperboard, with the same company-dependent duty ranges. The choice of Cambodia and Malaysia as landing spots was itself revealing: the original 2025 orders covered China, Thailand and Vietnam, so relocating finishing lines to either of those countries would have accomplished nothing. The migration went precisely where the orders did not reach, which is the signature of circumvention rather than ordinary investment.
The procedural clock is now running on comment and appeal. Case briefs are due within 14 days of publication, which lands on July 24, with rebuttal briefs due seven days after that. Parties may request a hearing within 30 days. Commerce will also notify the US International Trade Commission, which may request consultations and, if it believes a significant injury issue is presented, has 60 days to provide written advice. A final determination is expected later this year; Commerce did not announce a date, and the original schedule, which contemplated final determinations by mid-June, was overtaken by the shutdown tolling and extensions.
Friday’s determination fits a pattern that has become one of the defining features of modern US trade enforcement. In 2023, Commerce found that solar cells and modules assembled in Cambodia, Malaysia, Thailand and Vietnam from Chinese wafers were circumventing the orders on Chinese solar products, a finding that reshaped billions of dollars in clean energy supply chains. In 2024, paper shopping bags from a nine-country group that included Cambodia and Malaysia drew their own antidumping orders. The sequence is by now familiar: duties land on China, production hops the border, and an anti-circumvention case follows.
What distinguishes the paper plate case is the speed of the migration and the speed of the response. The coalition alleges finishing operations began moving before the original orders were even in place, and Commerce moved from request to initiation in six weeks, then to a country-wide preliminary finding in under eleven months despite a government shutdown. Trade lawyers have watched the agency grow steadily more aggressive with the circumvention tool, and Friday’s notices, with their blanket country-wide scope and blocked certification pathway for Cambodian suppliers, are among the more muscular applications yet.
The action also lands in the middle of the loudest summer in American trade policy in decades, and it says something about where the durable power now sits. The Supreme Court’s February ruling in the IEEPA tariff cases stripped away the emergency statute the White House had used for its global tariffs, forcing a scramble to rebuild the wall with other tools. A temporary 10 percent global surcharge imposed under Section 122 of the Trade Act expires by statute on July 24, the same day the paper plate comment briefs are due, and only Congress can extend it.
Waiting behind it is the administration’s proposed Section 301 action on forced labor enforcement, which would place duties of 10 percent to 12.5 percent on goods from 60 economies following hearings that concluded in Washington on July 9. Cambodia and Malaysia are both on that list. A Cambodian paper plate that today faces a 515.40 percent circumvention deposit could, by late summer, also carry whatever Section 301 rate emerges from that proceeding. For exporters in Phnom Penh and Kuala Lumpur, the two tracks compound: one punishes routing Chinese goods through their territory, the other their own regulatory enforcement records.
Yet the contrast between the two tracks is instructive. The headline tariff programs remain legally contested, politically volatile and subject to expiration dates. The antidumping, countervailing duty and circumvention machinery, by comparison, is old, statutorily grounded and litigation-tested. It grinds slowly, but its output does not vanish when a court rules on presidential power or a surcharge sunsets. Companies that plan supply chains around the drama of the big-ticket tariffs while ignoring the quiet dockets at Commerce’s Enforcement and Compliance unit routinely discover that the quiet dockets are where the ruinous numbers live.
The economics of Friday’s decision are stark for everyone in the chain. At a 515.40 percent deposit rate, a container of paper plates invoiced at 100,000 dollars requires a cash deposit of more than 515,000 dollars on the antidumping side alone before it clears customs. No importer pays that and stays in the business; the rate functions as a prohibition. The retroactive suspension of liquidation is more dangerous still, because it attaches to goods that were imported, sold and consumed months ago. Importers who priced those plates without duty exposure now face assessments that can exceed the original value of the merchandise several times over.
The ripple effects will reach buyers who have never read a Federal Register notice. Disposable plates are a staple purchase for grocery private labels, party goods retailers, caterers, school cafeterias, hospitals and quick service restaurants, sectors that shifted heavily toward imported tableware over the past decade because the price gap was too wide to ignore. With the Chinese, Thai and Vietnamese routes already covered by duties and the Cambodian and Malaysian routes now closed, procurement teams face a narrower and more expensive set of options heading into the fall buying season, and some portion of the difference will find its way to shelf prices.
Nor is Commerce the only agency watching this lane. Customs and Border Protection runs its own evasion enforcement under the Enforce and Protect Act, which targets importers who evade antidumping and countervailing duties through transshipment and misdeclared origin, and the two agencies increasingly work the same supply chains from different directions. An importer who slips past one process can be caught by the other, with interim measures, penalties and, in egregious cases, criminal referrals. Friday’s country-wide finding gives CBP a clean legal hook, and trade compliance specialists expect scrutiny to spill over into adjacent paper product categories where the same migration pattern has been alleged.
There is also room for the numbers to move before the case closes. A preliminary circumvention determination rests on the record as it stands, and Commerce has signaled it will verify respondent information before issuing its final decision. Companies that cooperated may see their treatment refined; those that did not will remain exposed to the adverse-inference rates. The final determination can narrow or confirm the country-wide scope, adjust the certification framework, and set the terms under which suspended entries are ultimately assessed. What it almost never does, veterans of these cases note, is make retroactive liability disappear.
Customs attorneys generally advise that in situations like this one, importers should immediately audit every entry of paper plates from Cambodia and Malaysia since August 22, 2025, determine which remain unliquidated, file the required post-summary corrections, and begin assembling origin documentation for the paperboard in every shipment. The August 7 certification deadline for past entries is unforgiving, and the recordkeeping obligations run for years. Retailers and foodservice distributors holding supply contracts with Cambodian or Malaysian plate makers will need to reprice or resource them, and indemnification clauses in those contracts are about to receive close reading.
For US producers, the determination is vindication and breathing room. The coalition’s members have argued since 2024 that they were being battered by unfairly traded imports that captured shelf space at prices domestic mills could not meet. The original orders were supposed to fix that; the migration to Cambodia and Malaysia hollowed them out within months. Extending the duties restores the protection the orders promised, and the country-wide scope makes the next relocation harder. Epstein said after initiation that he was confident the “extensive audits to be conducted will support a favorable outcome for the American paper plate industry.” Friday delivered it, at least preliminarily.
For Cambodia and Malaysia, the decision removes the economics of a niche export industry that materialized almost overnight, and it arrives at a delicate moment. Both countries are already navigating the proposed forced labor tariffs, and both have watched the solar precedent, in which circumvention findings permanently redrew investment patterns. The lesson foreign investors will draw is uncomfortable for host governments courting Chinese manufacturing capital: a factory built primarily to change a product’s passport is a factory built on borrowed time, and US trade law is increasingly efficient at calling the loan.
Where does the trade go next? The likeliest answers are a partial return of market share to domestic producers, higher landed costs for buyers, and a search for new third countries, with India and Indonesia the perennial candidates whenever Southeast Asian routes close. The coalition has already demonstrated it will chase the production wherever it lands, and Commerce has demonstrated it will entertain country-wide remedies on an accelerating timetable. Any entrepreneur weighing a paper plate venture in a new jurisdiction now has to price in the probability that the duties arrive before the second shipping season.
A paper plate is about as humble as international commerce gets, which is precisely why Friday’s notices deserve attention beyond the tableware aisle. They show, in miniature, how the enforcement system now works: petition, order, migration, circumvention inquiry, country-wide remedy, retroactive deposits, certification gates, all in barely thirty months. In 2026 the United States is policing not just where goods are made but where their inputs are born, and it is doing so with tools no court ruling or sunset clause is likely to disturb. The dodge lasted less than a year. The bill, for those who took the route, covers every plate since August 22, 2025.