metal locking trade case

On July 9, 2020, List Industries Inc., Lyon LLC, Penco Products Inc., and Tennsco LLC (Petitioners) filed antidumping (AD) and countervailing duty (CVD) petitions against Certain Metal Lockers and parts thereof from China.

The subject metal lockers are typically used for storage in schools, fitness centers, athletic facilities, warehouses, transportation hubs, retail businesses, and other commercial and industrial establishments.

Locker rooms were specifically identified as a high risk danger zone for the spread of the coronavirus. With so many sports at all levels (professional, college, high school, club) canceled or postponed, demand for metal lockers must have taken a major hit.  Schools or businesses that have shut down and are struggling economically because of the coronavirus are for the most part not buying new lockers.

This petition looks like it is blaming imports for problems caused by the coronavirus.  But under U.S. trade laws, the U.S. International Trade Commission (“ITC”) only has to determine whether imports are “a” cause of material injury, not “the” cause or most important cause of injury.  If the Petitioners can show that imports had an adverse impact on volumes (e.g. loss of market share) and prices (e.g., price decreases or price suppression) that affected the domestic industry’s financial performance, the ITC will find that imports were a cause of material injury.

Another part of this case will be conducted by the U.S. Department of Commerce (“DOC”).  The DOC will 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, and determine the amount of AD/CVD duties to impose.  The dumping margins calculated for products from China are often very high because China is considered a non-market economy so that DOC will not use the Chinese producer’s actual costs, but instead will use surrogate values to derive a normal value to compare against the U.S. export price.

Both agencies have to make affirmative findings of injury or threat of injury (ITC) or of dumping or subsidies (DOC) in order for AD/CVD duties to be imposed on the subject imports.

Scope

The proposed scope definition (see here) covers a wide range of metal lockers that are defined as storage devices with a width and depth of 27 inches or less, and may be floor-standing or wall mounted.  The lockers can be sold as individual or multiple locker units, and may be shipped pre-assembled or as sets of component parts, or as unassembled knocked down lockers.  The scope excludes certain lockers such as certain types of wire mesh lockers; lockers made entirely of plastic, wood, or any non-metallic material; multi-access point lockers; and lockers with installed electronic, internet-enabled locking device.

Metal lockers are imported into the United States under Harmonized Tariff System of the United States (“HTSUS”) subheadings 9403.20.0078. Parts of subject metal lockers are classified under HTSUS subheadings 9403.90.8041. These HTSUS subheadings are provided for reference only. The written description of the scope of the investigations is dispositive.

Alleged AD/CVD Margins.

Petitioner calculated estimated dumping margins of 277.40 – 330.80%.

Petitioner did not provide any specific Chinese subsidy margin calculations.

Named Exporters/ Producers

Petitioner included a list of companies that it believes are producers and exporters of the subject merchandise.  See attached list here.

Named U.S. Importers

Petitioner included a list of companies that it believes are U.S. importers of the subject merchandise.  See attached list  here.

 

Estimated Schedule of Investigations.

July 9, 2020 – Petitions filed

July 29, 2020 – DOC initiates investigation

July 30, 2020 – ITC Staff Conference

August 24, 2020 – ITC preliminary determination

 

December 6, 2020 – DOC CVD preliminary determination (assuming extended deadline) (10/2/20 – unextended)

February 4, 2021 – DOC AD preliminary determination (assuming extended deadline) (12/16/20 – unextended)

June 19, 2021 – DOC final determination (extended and AD/CVD aligned)

August 3, 2021 – ITC final determination (extended)

August 10, 2021 – DOC AD/CVD orders issued (extended)