Biden Administration Decision Falls Short of Relief Needed for Domestic Manufacturers

WASHINGTON, Nov. 11, 2024 /PRNewswire/ -- On Friday evening, November 8, the White House released its decision in a Section 201 trade case involving imports of fine denier polyester staple fiber (PSF), a product used in the production of clothing, wipes and defense applications. While there are some positive aspects to President Biden's decision, the domestic industry is extremely disappointed that the action fails to provide protection from the low-priced imports that have caused the closure of two factories and the layoff of hundreds of workers.

The White House decision was in response to an investigation by the U.S. International Trade Commission (ITC) that found imports of PSF from numerous countries caused serious injury to the domestic producers of PSF. The ITC unanimously recommended strong import relief in the form of a quota on imports that were avoiding duties under what is called the Temporary Importation under Bond (TIB) regulation. Moreover, the ITC recommended tariffs on all but a few imports that were not imported under the TIB provision. The purpose of the recommended import relief was to allow the domestic producers to regain financial health, rehire workers, and boost their international competitiveness. The U.S. companies have plans and pledged to invest hundreds of millions of dollars in their production facilities if effective import relief was granted by the White House.

Unfortunately, President Biden's proclamation does not achieve that goal. While his decision addresses the TIB import problem – a very helpful and necessary aspect of the remedy – it falls short of the import relief needed by U.S. producers for long-term success. In rejecting the unanimous recommendation by the ITC to impose significant tariffs on PSF imports, the President is allowing imports to continue to undersell the domestic producers. Without a more robust remedy, the U.S. producers are unlikely to recover to a level that would allow them to invest in this critical American manufacturing industry. This is a disappointment to the domestic industry and its workers, who are facing an existential threat.

Background

On February 28, 2024, the U.S. PSF industry filed a petition for relief with the ITC under the safeguards provisions of the Trade Act of 1974, also known as Section 201. 

Fine denier PSF is a manmade fiber, produced from both virgin and recycled polyethylene terephthalate inputs, that is similar in appearance to cotton or wool. Fine denier PSF goes into a huge variety of important consumer products that impact our daily lives in seen and unseen ways. It is used in numerous applications including knit/woven (textiles for clothing and bed linens), nonwoven (household and hygiene products like baby wipes, diapers, coffee filters, and medical gowns), and as fill in pillows and similar products. It is also used to manufacture apparel and gear for our military, including high tech fabric that helps evade electronic detection.

The three petitioners representing the domestic PSF industry are Darling Fibers of Darlington, South Carolina; Nan Ya Plastics Corp, America of Lake City, South Carolina; and Sun Fiber LLC of Richburg, South Carolina.

Although U.S. producers obtained trade relief in 2018 with antidumping and countervailing duty orders on fine denier PSF imports from China, India, South Korea, and Taiwan, the benefits from those trade orders was short-lived. Imports from numerous other countries surged into the U.S. market. U.S. producer Alpek Polyester (formerly known as DAK Americas) (Charlotte, NC and Moncks Corner, SC) was forced to close in 2021. Darling was forced to suspend operations in 2022 and release over 300 employees. Other domestic producers have had to temporarily idle capacity for the same reason.

As the ITC found, the domestic industry is now in a severely injured state, threatening the future of PSF manufacturing in the United States and the hundreds of well-paid manufacturing jobs that are vital to families and the small, rural communities surrounding the domestic facilities.

The product covered by President Biden's November 8 proclamation is fine denier PSF, not carded or combed, measuring less than 3.3 decitex (3 denier) in diameter, whether coated or uncoated. Fine denier PSF is classifiable in the Harmonized Tariff Schedule of the United States (HTS) in subheading 5503.20.00 and described in statistical reporting number 5503.20.0025 or 9813.00.0520.

SOURCE Darling Fibers, Nan Ya Plastics Corp America and Sun Fiber LLC