U.S. Department of Commerce Issues Affirmative Critical Circumstances Finding in Trade Remedy Investigation of Chinese Imports, Says Kelley Drye & Warren

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Apr 23, 2019, 07:30 ET

WASHINGTON, April 23, 2019 /PRNewswire/ -- On Friday, April 19, 2019, the U.S. Department of Commerce (the "Commerce Department"), issued an affirmative preliminary "critical circumstances" determination in the antidumping and countervailing duty investigations on Chinese imports of polyester textured yarn. The Commerce Department found that imports of the yarn surged into the United States immediately after the case was filed in October 2018 in order to avoid the preliminary imposition of duties. As a result of the Commerce Department's affirmative finding, imports of all polyester textured yarn from China will be subject to antidumping and countervailing duties retroactively – i.e. 90 days from the date preliminary duties are imposed.

The Commerce Department is scheduled to announce preliminary countervailing duty rates on April 29, 2019, and preliminary antidumping duty rates on June 26, 2019. The Commerce Department will then instruct the U.S. Customs and Border Protection ("CBP") to retroactively collect cash deposits at the preliminary subsidization and dumping rates beginning on the date that is 90 days prior to the date preliminary duties go into effect, which is the date the Commerce Department's preliminary findings are published in the Federal Register.

Two major U.S. synthetic yarn producers – Unifi Manufacturing, Inc. ("Unifi") and Nan Ya Plastics Corporation, America ("Nan Ya") – filed the allegation regarding imports of polyester textured yarn from China earlier this month. Unifi and Nan Ya filed petitions with the Commerce Department and the U.S. International Trade Commission (the "USITC") in October 2018 alleging that dumped and subsidized imports of polyester textured yarn from China and India are causing material injury to the domestic industry. The Commerce Department initiated the investigations in November 2018, and the USITC preliminarily determined in December 2018 that imports from China and India are causing injury to the U.S. domestic industry.

The products affected by this case are made by Unifi at its production facilities in Yadkinville, North Carolina, and Madison, North Carolina, where Unifi employs approximately 1,100 and 450 people, respectively, and by Nan Ya at its production facility in Lake City, South Carolina, where Nan Ya employs approximately 900 people.

FACT SHEET

Antidumping and countervailing duties: Antidumping duties are intended to offset the amount by which a product is sold at less than fair value, or "dumped," in the United States. The margin of dumping is calculated by the Commerce Department. Estimated duties in the amount of the dumping are collected from importers at the time of importation. Countervailing duties are intended to offset the unfair subsidies that are provided by foreign governments and benefit the production of a particular good. The USITC, an independent agency, will determine whether the domestic polyester textured yarn industry is materially injured or threatened with material injury by reason of the unfairly traded imports.

Next steps: The Commerce Department is scheduled to announce preliminary determinations in the countervailing duty and antidumping duty investigations on April 29, 2019, and June 26, 2019, respectively, at which point preliminary cash deposit rates will be put in place. Due to the Commerce Department's April 19, 2019 affirmative "critical circumstances" determination, these deposits will be collected on polyester textured yarn imported from China during the 90 days preceding the date that the preliminary duties go into effect. The entire investigative process will take approximately one year, with final determinations of dumping, subsidization, and injury likely occurring by the end of 2019.

Product descriptions: The product covered by the petitions is polyester textured yarn, which is synthetic multifilament yarn that is manufactured from polyester (polyethylene terephthalate). Polyester textured yarn is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation, and the appearance of a natural fiber. The petitions include all forms of polyester textured yarn, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of plies, finish (luster), cross section, color, dye method, texturing method, or packing method (such as spindles, tubes, or beams).

Petitioning companies: The petitioning companies are Unifi Manufacturing, Inc. and Nan Ya Plastics Corporation, America, represented by Kelley Drye & Warren LLP.

SOURCE Kelley Drye & Warren LLP