New antidumping duty petition filed against imports of polyester textured yarn from Indonesia, Malaysia, Thailand, and Vietnam: Consequences for exporters and US importers

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International Trade Alert

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On October 28, 2020, Unifi Manufacturing, Inc. and Nan Ya Plastics Corporation, America filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that polyester textured yarn (PTY) from Indonesia, Malaysia, Thailand, and Vietnam is being sold in the US at less than fair value. The petitioners seek the imposition of antidumping (AD) duties on imports of PTY from these four countries and allege dumping margins of 15.51 percent for Indonesia, 75.13 percent for Malaysia, 56.80 percent for Thailand, and 42.29 percent for Vietnam.

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). Additional duties can be imposed if the DOC determines that imported goods are dumped and if the ITC also determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.

Products covered by the investigations

The product covered by the petition, PTY, is synthetic multifilament yarn manufactured from polyester. PTY is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation and the appearance of a natural fiber. The petition covers all forms of PTY, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of piles, finish (luster), cross section, color, dye method, texturing method, or packing method (such as spindles, tubes or beams).

PTY is normally entered under subheadings 5402.33.3000 and 5402.33.6000 of the Harmonized Tariff Schedule of the United States (HTSUS). It may also be entered under HTSUS subheading 5402.52.00.

In 2019, the value of US imports of PTY was $12.6 million from Indonesia, $8.8 million from Malaysia, $7.6 million from Thailand, and $4.5 million from Vietnam.

Foreign producers and US importers of PTY from Indonesia, Malaysia, Thailand, and Vietnam

The petition identifies 11 exporters of PTY from Indonesia, five from Malaysia, 12 from Thailand, and 9 from Vietnam, as well as 36 US importers of PTY. See the lists of exporters and importers from the petition.

Estimated schedule of investigations

AD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD investigations on PTY from the Indonesia, Malaysia, Thailand, and Vietnam.

 10/28/2020
 –  Petition filed
 12/14/2020
 –  ITC preliminary injury determination
  4/6/2021
 –  DOC preliminary determinations, if not postponed
  5/26/2021
 –  DOC preliminary determinations, if fully postponed
 10/15/2021
 –  DOC final determinations, if both preliminary and final determinations are fully postponed
 11/29/2021
 –  ITC final injury determination, if DOC determinations are fully postponed
 12/6/2021
 –  AD orders published

Consequences for exporters and US importers

US AD 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 duty rates determined for the subject merchandise on or after the date when 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 duties will remain in effect if the DOC and ITC make affirmative final determinations.

The DOC calculates specific AD margins for certain individual producers and exporters selected for examination. Such rates can often 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 margins. Duties imposed at these higher margins can force exporters to stop shipping to the US and importers to cease importation of subject merchandise. Thus, interested parties (including foreign producers, exporters, and importers) should have a strategy for addressing AD investigations, including possible participation.

Under the statutory time schedule for AD 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 (public conference) is held approximately 21 to 23 days after the filing date. As a result, agency staff work begins almost immediately. Thus, a quick response is essential to understanding the specific implications of these developments and to prepare and implement a pertinent strategy.

To learn more, please contact any of the authors.