The last few months have seen an onslaught of trade actions brought by U.S. companies against incoming products of all kinds from China. With all the trade issues involving China and bipartisan anti-China sentiment prevalent in the United States, now is a great time to bring such actions. The international trade lawyers at my firm almost exclusively defend against antidumping and countervailing duty claims instead of bringing them. So I say this not to encourage more such actions, but as a simple statement of fact. If you are importing products from China, now is the time to know the trade risks of your imports.
Again, the international trade lawyers at my firm make our money by representing the Chinese manufacturers and their US importers so the more petitions brought against incoming Chinese products the more money we make. The more petitions, the more our law firm financially benefits and the more I personally financially benefit.
And yet, from an economic and policy standpoint even I am starting to get concerned by all these cases. I say this because of the massive onslaught of AD/CVD cases being brought against China and how aggressively (on multiple levels) the United States Commerce Department has been on these cases. To the point where I am finding myself wondering how important a trade deal with China will be if the United States giveth on the one hand and then taketh via these AD/CVD cases on the other hand. And is it right for the United States government to almost “on the sly” be pushing American (and foreign companies as well) away from China, without making this policy clearer?
Based on all that I hear from my own firm’s China lawyers and international manufacturing lawyers, many American and European companies are decreasing or eliminating their business with China. See China-US Decoupling Continues and Will Continue, but Must be Done Right and China Manufacturing: Is the Bloom now Off That Rose? and The China-US Trade War and the Winner is….MEXICO. It appears US foreign policy is to drive business from China to countries like Mexico, the Ukraine, Vietnam, Thailand, the Philippines, and Indonesia, among others. Should not our government just come out and say this? What this means big picture is that slowly but surely the price of products from China in the United States is rising and will continue to rise. So as one of our China lawyers so often tells our clients: “you need to act accordingly.”
But I digress….
The most recent case to drop came down this week comes against Chinese metal file cabinet producers producers and exporters and the below explains more about that petition.
On April 30, 2019, Hirsh Industries LLC (Petitioner), filed antidumping (AD) and countervailing duty (CVD) petitions against vertical metal file cabinets (“file cabinets”) from China. Go here to see a copy of that petition.
Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine not only that dumping or subsidization is occurring, but also that the subject imports are causing “material injury” or a “threat of material injury” to the domestic industry.
Chinese file cabinets are the latest product targeted for AD/CVD duties by US manufacturers struggling with the cost and supply problems caused by steel and aluminum tariffs imposed by President Trump. Hirsh and other US file cabinet producers have faced increased steel prices in the US market which puts them at a competitive disadvantage against Chinese file cabinet producers that do not have their steel prices artificially inflated by President Trump’s tariffs. The tariffs imposed to protect US steel and aluminum producers have trickled down and led to . downstream US manufacturers of steel products, such as file cabinets, steel kegs, steel wheels, fabricated structural steel, to seek their own AD/CVD protection against their import competition.
The proposed scope definition in the petition that identifies the merchandise to be covered by this AD/CVD investigation includes “freestanding vertical metal file cabinets containing extendable file storage elements, having a width of 25 inches or less and having a height greater than its width.”
The proposed scope definition is set forth here.
Alleged AD Margins.
Petitioner calculated estimated dumping margins for China that range from 120.48% to 196.79%.
Though Petitioner alleged numerous government subsidy programs that benefitted the Chinese wood cabinet industries, Petitioner did not allege specific subsidy rates.
Named Exporters/ Producers
Petitioner included a list of companies it believes produce and export the subject merchandise. Go here for that list of China metal file cabinet producers and exporters.
Named U.S. Importers
Petitioner included a list of United States companies it believes are importers of the subject merchandise. Go here to see that U.S. importer list
Estimated Schedule of Investigations.
April 30, 2019 – Petitions filed
May 20, 2019 – DOC initiates investigation
May 21, 2019 – ITC Staff Conference
June 14, 2019 – ITC preliminary determination
September 27, 2019 – DOC CVD preliminary determination (assuming extended deadline)
November 26, 2019 – DOC AD preliminary determination (assuming extended deadline)
April 9, 2020 – DOC final determination (extended and AD/CVD aligned)
May 24, 2020 – ITC final determination (extended)
May 31, 2020 – DOC AD/CVD orders issued (extended)