New antidumping and countervailing duty petition: cold-water gas-powered pressure washers from China and Vietnam
On December 29, 2022, FNA Group, Inc. filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that cold-water gas-powered pressure washers (GPPW) from China and Vietnam are being sold in the US at less than fair value. The petition also alleges that that the government of China is providing unfair subsidies to its producers and exporters of cold-water GPPW to the US.
The company seeks the imposition of antidumping (AD) duties on imports of GPPW from China and Vietnam, alleging dumping margins ranging from 136.7 percent to 242.34 percent for China and 103.28 percent to 209.22 percent for Vietnam. The company also seeks the imposition of countervailing (CVD) duties on imports of GPPW from China, alleging an unspecified total level of subsidies exceeding one 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 US at less than fair value (ie, dumped). A domestic industry may also seek 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 merchandise covered by the petition is cold-water GPPW (also commonly known as power washers), which are machines that clean surfaces using water pressure that are powered by an internal combustion engine, air-cooled with a power take-off shaft, in combination with a positive displacement pump. This combination of components (ie, the internal combustion engine, the power take-off shaft, and the positive displacement pump) is defined as the “power unit." The petition covers cold-water GPPW, whether finished or unfinished, whether assembled or unassembled, whether or not assembled or packaged with a frame, cart, or trolley, with or without wheels attached, and whether or not containing any additional parts or accessories to assist in the function of the power unit, including, but not limited to, spray guns, hoses, lances, and nozzles.
For purposes of the petition, an unfinished and/or unassembled cold-water GPPW consists of, at a minimum, the power unit or components of the power unit, packaged or imported together. A power unit from the subject countries with or without additional components constitutes an unfinished cold-water GPPW for purposes of the petition regardless of the origin of its engine or any components (including components that may be added in a third country). Finished and unfinished cold-water GPPW that are further processed in a third country or in the United States are also covered.
The petition does not cover hot-water GPPW. The petition also specifically excludes merchandise covered by the antidumping and countervailing duty orders on certain vertical shaft engines between 99cc and up to 225cc, and parts thereof from China.
The products covered by the petition are provided for under subheadings 8424.30.9000 and 8424.90.9040 of the Harmonized Tariff Schedule of the United States.
The total value of US imports of cold-water GPPW from China and Vietnam was $712.7 million in 2021.
Foreign producers and US importers of cold-water GPPW
The petition identifies 41 exporters and 26 US importers of cold-water GPPW from China and Vietnam. See the lists of foreign producers and US importers from the petition.
Estimated schedule of the 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 cold-water GPPW from China and Vietnam.
12/29/2022 – Petition filed
2/13/2023 – ITC preliminary injury determination
3/24/2023 – DOC preliminary CVD determinations, if not postponed
5/30/2023 – DOC preliminary CVD determinations, if fully postponed
6/7/2023 – DOC preliminary AD determinations, if not postponed
7/27/2023 – DOC preliminary AD determinations, if fully postponed
12/18/2023 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed
1/30/2024 – ITC final injury determination, if DOC determinations are fully postponed and DOC final determinations are aligned
2/6/2024 – AD and CVD orders published
Consequences for exporters and US companies
US AD and CVD investigations can result in the imposition of substantial duties in addition to 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 on which the DOC’s preliminary determination is published in the Federal Register. In certain circumstances, such duty deposit requirements may retroactively go into effect 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 foreign producers and exporters selected for examination. Such rates are often much lower than those alleged in the petition. However, foreign 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 US and importers to cease importation of subject merchandise. Thus, interested parties – including US and foreign producers, exporters, importers and downstream US purchasers of the subject merchandise – are encouraged to have a strategy for addressing AD and CVD investigations, including possible participation.
Under the statutory time schedule for AD and CVD investigations, the first decision (ie, the preliminary ITC determination of 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 – in this case, by February 13, 2023. An ITC hearing (ie, a public conference) is held around 21 to 23 days after the filing date. As a result, agency staff work, including the issuance of questionnaires to interested parties, begins almost immediately. Thus, quick action is encouraged to understand the specific implications of these developments as well as to prepare and implement a pertinent strategy.
To learn more, please contact any of the authors.