Antidumping and Countervailing Duty Petitions for Paper Plates

On January 24, 2024, US paper plate producers filed antidumping (AD) and countervailing duty (CVD) petitions against paper plate imports from China, Thailand and Vietnam claimed to be (a) dumped – i.e., sold into the United States at less than fair/normal value prices and (b) government subsidized. AD case is against all three countries. CVD is just against China and Vietnam. The petition alleges dumping margins of:

Remedial AD import duties are requested for those amounts. No specific claimed subsidy margins.

For market economies, the normal value is the home market or third-country price, or actual cost, plus a reasonable profit of the foreign producer/exporter. For deemed non-market economies, China and Vietnam, normal value is a constructed cost, plus deemed reasonable profit based on surrogate values in a market economy deemed of a comparable level of economic development to China or Vietnam.

Offsetting US AD/CVD import duties are imposed if (a) the US Department of Commerce (DOC) finds dumping or subsidies based on responses to DOC questionnaires (and verification audit thereof) by the accused foreign exporters/producers, and (b) the US International Trade Commission (ITC) finds that there is material injury (or threat thereof) because of the dumped or subsidized imports to a US industry.

See the below Addendum for a detailed scope of the product covered by the petitions.

The estimated most immediate upcoming deadlines in this investigation are in the ITC preliminary injury investigation:

See Import Injury Investigations | United States International Trade Commission (usitc.gov) for ITC questionnaires and the petition.

Generally, the ITC finds sufficient indicia of injury to a US industry from the accused imports at this preliminary stage to continue the AD/CVD investigation (i.e., not end it). If so, then the investigation moves to DOC.

The ITC threshold to find injury at this preliminary stage is low. Still, participation in ITC preliminary injury investigation can lay the factual foundation for a later final negative ITC injury decision, ending the case, which happens around 30%-50% of the time (varies over time). It is critical not to make statements in the rushed ITC preliminary injury stage that have the potential to negatively impact the final stage.

Some AD/CVD petitions on their face indicate ITC injury issues, giving hope for a negative ITC injury decision. This petition does indicate that (a) there might be a possibility that Thailand or Vietnam might be excluded from the case as negligible US suppliers and (b) there is weakness in the injury case overall from the inability of US producers to fully supply the US market, weak evidence of accused imports underselling US producers and US production, sales, prices and perhaps profits increasing throughout the investigation.

The DOC preliminary CVD subsidy decision (only China and Vietnam) is on or around April 17, 2024. But this date is generally extended about 65 days (about June 21, 2024) if an investigated foreign producer/exporter satisfactorily and fully participates at DOC by accurately answering DOC questionnaires as to the extent (if any) of subsidies and later survives a rigorous DOC verification audit thereof. Then, the exporter can get a subsidy CVD import duty margin based on the actual extent of received subsidies (if any). In contrast, failure to so participate results in a prohibitively high, adverse DOC CVD import duty.

The DOC preliminary AD decision is on or around July 1, 2024. But this date, too, is generally extended about 50 days (on or around September 22, 2024) if an investigated foreign producer/exporter satisfactorily participates at DOC, fully and accurately answering DOC questionnaires as to the extent (if any) of dumping and later survives a rigorous DOC verification audit thereof. If so, the exporter gets a dumping margin based on its actual extent of dumping (if any), and not the petitioner-claimed dumping margins. In contrast, failure to so participate generally results in the highest petitioner-alleged dumping margin as the dumping import duty.

AD and CVD import duty liability generally begins as to imports at the time of the DOC preliminary AD or CVD decision. But it can be retroactive 90 days before then. The earliest theoretical date for retroactive AD duties is April 2, 2024; and for CVD is February 13, 2024. Retroactivity cannot be earlier than 20 days after petition filing. Retroactivity is to address certain 15% or more import surges following the filing of a petition that seek to avoid AD/CVD. But all the conditions to so find are generally, but not always, not found – e.g., the ITC must find that retroactivity is necessary to avoid the AD/CVD remedy being undermined, which generally (but not always) the ITC does not find, and AD margins must be found above 15% (US importer affiliated to exporter) or 25% (US importer non-affiliated to exporter) or an export subsidy found for CVD.

To determine their AD/CVD margin, DOC generally issues dumping and subsidy questionnaires to the two largest exporters to the United States from each accused country. All other exporters from a particular country usually get an AD/CVD margin based on the DOC findings as to the two largest exporters from that country.

The date of the DOC final CVD and AD decisions is on or around December 14, 2024, if all deadlines are fully extended (which is common). All events at DOC will appear at https://access.trade.gov/login.aspx.

The date of the ITC final injury decision is on or around January 28, 2025, if all deadlines are fully extended (which, again, is common).

ADDENDUM: SCOPE OF THE INVESTIGATION

Per the petition:

The merchandise subject to this investigation is certain paper plates. Paper plates subject to this investigation may be uncolored, white, colored, or printed. Printed paper plates subject to this investigation may have any type of surface finish and may be printed by any means with images, text and/or colors on one or both surfaces. Colored paper plates subject to this investigation may be colored by any method, including but not limited to printing, beater-dyeing, and dip-dyeing. Paper plates subject to this investigation may be produced from paper of any type, may have any caliper or basis weight, may have any shape or size, may have one or more than one section, may be embossed, may have foil or other substances adhered to their surface, and/or may be uncoated or coated with any type of coating.

The paper plates subject to this investigation remain covered by the scope of this investigation whether imported alone or in any combination of subject and non-subject merchandise. The paper plates subject to this investigation include paper plates matching the above description that have been finished, packaged, or otherwise processed in a third country by performing finishing, packaging, or processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the paper plates.

Excluded from the scope of this investigation are paper plates produced directly from liquid fiber that is formed into the desired shape and then cured. Also excluded from the scope of this investigation are paper bowls, paper buckets, and paper food containers with closeable lids.

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