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Petition Filed To Impose Antidumping And Countervailing Duties On Multilayer Flooring From China

November 3, 2010

On October 21, 2010, a petition was filed with the U.S. International Trade Commission (ITC) and the U.S. Department of Commerce (Commerce), requesting that antidumping (AD) and countervailing duties (CVD) be imposed on multilayered flooring from China. These investigations will focus on whether engineered wood flooring from China sold in the U.S. is being dumped or sold at subsidized prices. 

Who Filed The Petition

The petition was filed by the Coalition for American Hardwood Parity (“Coalition”), an ad hoc association of U.S. manufacturers of multilayered wood flooring comprised of the following companies: Anderson Hardwood Floors, LLC, Fountain Inn, SC; Award Hardwood Floors, Wausau, WI; Baker's Creek Wood Floors, Inc., Edwards, MS; From the Forest, Weston, WI; Howell Hardwood Flooring, Dothan, AL; Mannington Mills, Inc., Salem, NJ; Nydree Flooring, Forest, VA; and Shaw Industries Group, Inc., Dalton, GA.  Their petition suggests that the AD and CVD duty rates should be at least 100%.

What Are Antidumping Duties

AD duties  are special duties imposed on certain merchandise from a specified country where Commerce has determined that there are "sales at less than fair value." Also, to impose AD duties, there must be a finding by the ITC that there is injury to the domestic industry as a result of the sales at less than fair value. AD duty rates are expressed as a percentage of the entered value. Therefore, if the AD rate is 30%, then the AD duties are 30% of the FOB price at the time of importation.

What Are Countervailing Duties

CVD are additional duties imposed by Commerce on imported good where there is evidence that the foreign government has provided a subsidy with respect to certain types of goods and where it is demonstrated that there is a nexus between the subsidy and the export of such goods. The amount of the CVD is expressed as a percentage of the entered value and collected at the time of importation. Therefore, if the CVD percentage is 15% and the FOB value of the imported goods is $100, the CVD would be $15. This is in addition to the regular duties paid on the imported goods.

What Happens Next

The petitions that have been filed will now be reviewed for technical adequacy by both the ITC and Commerce. If the petitions are found to comply with the applicable requirements, each agency will launch a separate investigation.  Early on, Commerce will use various methods to identify “respondents” -- Chinese companies that export hardwood flooring -- and then select a number of these companies to report sales and other information to calculate company specific AD and CVD rates. Commerce’s investigation will focus on whether there is dumping and/or subsidized prices, and the ITC will review whether there is injury to the U.S. hardwood flooring industry. This is going to be a fast-moving process, with a conference in Washington, D.C. on November 12 at the ITC and the ITC's preliminary determination due by December 6. CVD duties could go into place in as little as 3 months, based on a preliminary affirmative determination by Commerce.

What Can Exporters Do At This Point

It may be helpful for a Chinese supplier to identify itself to Commerce as a potential respondent and seek a separate AD and CVD rate. A non-participating exporter will likely be subject to very high “China-wide” rates – typically above 100 percent.  After receiving companies’ data, Commerce will calculate proposed AD and CVD rates. 

Preliminary Determinations

The ITC will issue a preliminary injury determination within 45 days – i.e., whether the U.S. industry has suffered economic injury by reason of imports. If this determination is affirmative, Commerce’s investigations will proceed. 

Commerce’s preliminary determinations will usually be published within about 3 months for the CVD investigation and 6 months for the AD investigation. If Commerce’s preliminary determinations are affirmative–meaning that it finds that sales were either unfairly subsidized, “dumped,” or both -- Commerce will publish the preliminary determinations in the Federal Register which will include the AD and CVD rates. Cash deposits of AD or CVD duties must be deposited once an affirmative Commerce preliminary determination is published.  

Final Determination

Commerce will then prepare and publish a final determination, in which the AD and CVD rates might be adjusted. Following an affirmative final determination by Commerce, the ITC will make a final injury determination. If the final determinations of the ITC is also affirmative—meaning that there is injury due to dumping and/or subsidizing, Commerce will publish AD and CVD orders. The whole process, from the start of the investigations, to the issuance of an AD and CVD orders, takes about a year.  

If you have any questions about this newsletter, please contact Steve Spraitzar at (415) 288-0427 or via email at steve.spraitzar@tuttlelaw.com.


Stephen Spraitzar is an attorney with the Law Offices of George R. Tuttle in San Francisco.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

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