New antidumping and countervailing duty petition: Walk-behind snow throwers and parts from China – consequences for exporters and US importers

On March 30, 2021, MTD Products Inc. filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that certain walk-behind snow throwers and parts thereof (snow throwers) from China are being sold in the United States at less than fair value. The petition additionally alleges that the government of China is providing unfair subsidies to producers and exporters of the product in China. The petitioner seeks the imposition of antidumping (AD) and countervailing duties (CVD) on imports of snow throwers from China, alleging dumping margins of 87.71 percent and an unspecified total level of subsidies exceeding 2 percent.

Under US law, a domestic industry can petition the government to initiate an AD investigation to determine whether an imported product is sold in the United States at less than fair value (ie, dumped).  A domestic industry may also seek the initiation of a CVD investigation into alleged subsidization of foreign producers or exporters by a foreign government. AD/CVD duties may be imposed if the DOC determines that imported goods are dumped and/or unfairly subsidized and if the ITC determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.

Products covered by the petition

The products covered by the petition are gas-powered walk-behind snow throwers (also known as snow blowers), which are snow moving machines that are powered by internal combustion engines and primarily pedestrian-controlled. The scope of the investigation covers certain snow throwers, whether self-propelled or non-self-propelled, whether finished or unfinished, whether assembled or unassembled, and whether containing any additional features that provide for functions in addition to snow throwing.

Walk-behind snow throwers covered by the petition are powered by internal combustion engines which are typically spark ignition, single or multiple cylinder, and air-cooled with power take off shafts.

For purposes of this investigation, an unfinished and/or unassembled snow thrower means at a minimum, a sub-assembly comprised of an engine, auger housing (ie, intake frame), and an auger (or “auger paddle”) packaged or imported together. An intake frame is the portion of the snow thrower – typically of aluminum or steel – that houses and protects an operator from a rotating auger and is the intake point for the snow. Importation of the subassembly whether or not accompanied by, or attached to, additional components including, but not limited to, handle(s), impeller(s), chute(s), track tread(s), or wheel(s) constitutes an unfinished snow thrower for purposes of this investigation. The inclusion in a third country of any components other than the snow thrower sub-assembly does not remove the snow thrower from the scope. A snow thrower is within the scope of this investigation regardless of the origin of its engine.

Specifically excluded is merchandise covered by the scope of the existing AD and CVD orders on imports from China of Certain Vertical Shaft Engines Between 225cc and 999cc, and Parts Thereof.

The snow throwers covered by the MTD Products Inc. petition are typically entered under Harmonized Tariff Schedule of the United States (HTSUS) subheading 8430.20.0060. Certain parts of snow throwers subject to the petition may also enter under HTSUS subheadings 8407.90.9040, 8407.90.9060, 8431.49.9090, and 8431.49.9095.

The value of US imports of snow throwers from China was $86.5 million in 2020.

Foreign producers and US importers of snow throwers from China

The petition identifies 36 exporters and 40 US importers of snow throwers from China.  See the lists of exporters and importers from the petition.

Estimated schedule of investigations

AD and CVD proceedings are conducted pursuant to a strict statutory time schedule.  Below is an estimated schedule for the AD and CVD investigations on snow throwers from China.

3/30/2021 – Petition filed

5/14/2021 – ITC preliminary injury determination

6/23/2021 – DOC preliminary CVD determination, if not postponed

8/27/2021 – DOC preliminary CVD determination, if fully postponed

9/6/2021 – DOC preliminary AD determination, if not postponed

10/26/2021 – DOC preliminary AD determination, if fully postponed

3/17/2022 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed

5/2/2022 – ITC final injury determinations, if DOC’s determinations are fully postponed

5/9/2022 – AD/CVD orders published

Consequences for exporters and US importers

US AD and CVD investigations can result in the imposition of substantial duties, in addition to other already applicable duties and tariffs.  If the ITC and DOC make affirmative preliminary determinations, US importers will be required to post cash deposits corresponding to the ad valorem AD and/or CVD duty rates determined for the subject merchandise on or after the date when the DOC’s preliminary determination is published in the Federal Register.  In certain circumstances, such duty deposit requirements can go into effect retroactively, 90 days prior to the date of publication.  The AD and CVD duties will remain in effect if the DOC and ITC make affirmative final determinations.

The DOC calculates specific AD and CVD margins for certain individual producers and exporters selected for examination.  Such rates often can be much lower than those alleged in the petition.  However, producers and exporters that do not participate in the investigations may be subject to substantially higher rates.  Duties imposed at these higher rates may force exporters to stop shipping to the United States and importers to cease importation of subject merchandise.  Thus, interested parties – including foreign producers, exporters and importers – may consider having a strategy for addressing AD and CVD investigations, including possible participation.

Under the statutory time schedule for AD and CVD investigations, the first decision (the preliminary ITC determination whether there is a reasonable indication that the US industry is materially injured or threatened with material injury by reason of the subject imports) must be made within 45 days after the filing of the petition.  An ITC hearing (ie, a public conference) is held about 21 to 23 days after the filing date – which in this case is May 14, 2021.  An ITC hearing (ie, a public conference) is held about 21 to 23 days after the petition filing date.  As a result, agency staff work – including the issuance of questionnaires to interested parties – begins almost immediately.  Thus, quick action is essential to understand the specific implications of these developments and to prepare and implement a pertinent strategy.

To learn more, please contact any of the authors.