New AD/CVD Petition: Glass Containers from China
On September 25, 2019, the American Glass Packaging Coalition (Petitioner), consisting of Anchor Glass Container Corp and Ardagh Glass Inc., filed antidumping (AD) and countervailing duty (CVD) petitions against Certain Glass Containers from China.
Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine that dumping or subsidization is occurring and that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.
This new AD/CVD petition targets glass containers (between 2 oz and 4 liters) used for beverages and other liquids or food materials (e.g, beer, wine, liquor/spirts bottles, non-alcoholic beverages, pasta sauce jars, other food containers).
Chinese glass containers are already subject to the Section 301 tariffs which currently are at 25%, but are scheduled to increase to 30% on October 1, 2019. Petitioner, however, states that the tariffs have done little to stop the influx of unfairly priced Chinese glass container imports.
This filing is just another in a long line of anti-dumping/countervailing duty cases being brought against Chinese products in an effort to increase the duties on those products when they enter the United States. The media is so focused on the US-China tariff wars, it has pretty much ignored the side wars being waged against Chinese products via the AD/CVD mechanism. These duties just keep coming and if and when the United States and China ever do reach a trade deal, these duties will likely be so prevalent and so high as to neutralize the economic effect of any such deal.
Truth is that with all the trade issues involving China and bipartisan anti-China sentiment prevalent in the United States, now is a great time to bring such actions. The international trade lawyers at my firm mostly defend against antidumping and countervailing duty claims instead of bringing them — we represent mostly the overseas producers and exporters and the US-based importers — so I say this not to encourage more such actions, but as a simple statement of fact. If you are importing products from China, you need to assess and know the trade risks of your imports and to think about alternative sourcing. See Has Sourcing Product From China Become TOO Risky?
It appears one of the chief US foreign policy goals is to drive business from China to countries like Mexico (note how quickly President Trump’s mini-tariff war with Mexico was resolved), the Ukraine, Vietnam, Thailand, the Philippines, Taiwan, and Indonesia, among others. What this means big picture is that the price of products coming from China to the United States will continue rising and, as one of our China lawyers so often tells our clients: “you need to act accordingly.” For more on moving your manufacturing from China, check out Moving Your Manufacturing Out of China: The Initial Decisions and Moving Manufacturing from China: Where you Gonna Run?
But I digress. Back to the new glass containers from China case.
Scope
The proposed scope definition in the petition identifies the merchandise to be covered by this AD/CVD investigation as follows:
The merchandise covered by this investigation are certain glass containers with a nominal capacity of 0.059 liters (2.0 fluid ounces) to 4.0 liters (135.256 fluid ounces) and an opening or mouth with a nominal outer diameter of 14 millimeters to 120 millimeters. The scope includes glass jars, bottles, flasks and similar containers; with or without their closures; whether clear or colored; and with or without, design or functional enhancements (including, but not limited to, handles, embossing, labeling, or etching).
Excluded from the scope of the investigation are: (1) Glass containers made of borosilicate glass, meeting United States Pharmacopeia requirements for Type 1 pharmaceutical containers; (2) Glass containers produced by ‘free blown’ method or otherwise without the use of a mold (i.e., without ‘mold seems’, ‘joint marks’, or ‘parting lines ‘); and (3) Glass containers without a ‘finish’ (i.e., the section of a container at the opening including the lip and ring or collar, threaded or otherwise compatible with a type of closure , including but not limited to a lid, cap, or cork).
Glass containers subject to this investigation are specified within the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7010.90.5009, 7010.90.5019, 7010.90.5029, 7010.90.5039, 7010.90.5049, 7010.90.5055, 7010.90.5005, 7010.90.5015, 7010.90.5025, 7010.90.5035, and 7010.90.5045.
The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of the investigations is dispositive.
Alleged AD Margins.
Petitioner calculated estimated dumping margins ranging between 264.13% and 818.57%.
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
September 25, 2019 – Petitions filed
October 15, 2019 – DOC initiates investigation
October 16, 2019 – ITC Staff Conference
November 9, 2019 – ITC preliminary determination
February 22, 2020 – DOC CVD preliminary determination (assuming extended deadline) (12/19/19 – unextended)
April 22, 2020 – DOC AD preliminary determination (assuming extended deadline) (3/3/20 – unextended)
September 4, 2020 – DOC final determination (extended and AD/CVD aligned)
October 19, 2020 – ITC final determination (extended)
October 26, 2020 – DOC AD/CVD orders issued (extended)
We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.
Source: https://www.chinalawblog.com/2019/09/new-ad-cvd-petition-glass-containers-from-china.html
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