/>iOn December 29, 2023, the U.S. Glass Producers Coalition filed antidumping (AD) and countervailing duty (CVD) petitions against glass wine bottle imports from China, Mexico and Chile claimed to be (a) dumped – i.e., sold into the United States at less than fair normal value prices and (b) government subsidized. AD versus China, Mexico and Chile. CVD just against China. The petition alleges dumping margins of 280.10% to 620.03% (China), 78.55% to 102.09% (Mexico), and 615.68% (Chile). Remedial AD import duties are requested of those amounts. No specific claimed subsidy margins.
For market economies, normal value is home market or third-country price, or actual cost plus reasonable profit of the foreign producer/exporter. For deemed non-market economy China, normal value is a constructed cost plus deemed reasonable profit based on surrogate values in a market economy deemed of comparable level of economic development to China.
Offsetting U.S. AD/CVD import duties are imposed if (a) the U.S. 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 U.S. International Trade Commission (ITC) finds that there is material injury (or threat thereof) by reason of the dumped or subsidized imports to a U.S. industry.
See below Addendum for detailed scope of product covered by the petitions.
The most immediate upcoming deadlines in this investigation are the ITC preliminary injury investigation, roughly (best guess) as follows (to be set soon by ITC):
- January 2, 2024: ITC questionnaires issued
- January 12, 2024: questionnaire responses due (short extension possible).
- January 19, 2024: ITC preliminary staff conference (witness testimony)
- January 26, 2024: written comments to ITC
- February 7, 2024:ITC preliminary injury decision
Actual dates for the above will soon appear in the ITC website at Import injury Investigations | United States International Trade Commission (usitc.gov), as well as the ITC questionnaires and the petition (petition available now at DOC website https://access.trade.gov/login.aspx where events at DOC will also appear).
Generally, the ITC finds sufficient indicia of injury to a U.S. 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 hurt at the final stage. Some AD/CVD petitions on their face indicate might be ITC injury issues, themselves giving hope for a negative ITC injury decision. This petition does not, but really says little on injury, at least in the public version, even compared to most petitions.
The DOC preliminary CVD subsidy decision (only China) is about March 22, 2024. But this date is generally extended about 65 days (here to about May 26, 2024) if an investigated foreign producer/exporter satisfactorily 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 its 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 about June 5, 2024. But this date too is generally extended about 50 days (here to about August 9, 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 March 7, 2024; and for CVD is January 18, 2023. 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% (U.S. importer affiliated to exporter) or 25% (U.S. importer not affiliated to exporter) or an export subsidy found for CVD.
DOC generally issues dumping and subsidy questionnaires to the two largest exporters to the United States from each accused country, to determine their AD/CVD margin. 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 about November 18, 2024, if all deadlines are fully extended (which is common).
The date of the ITC final injury decision is about January 2, 2025, if all deadlines are fully extended (which, again, is common).
Squire Patton Boggs members have successfully done hundreds of AD/CVD cases throughout the world over four plus decades, including as to glass products, and served in key positions at DOC and ITC, as well as key Congressional and U.S. Administration positions. SPB has a premier Government lobbying practice. SPD has in-house PhD Economists to assist. SPB is a global, full service, law firm with over 40 offices across four continents, plus local counsel, in all accused countries here.
ADDENDUM: SCOPE OF THE INVESTIGATION
Per the petition:
The merchandise covered by the investigations is certain narrow neck glass bottles, with a nominal capacity of 750 milliliters (25.36 ounces), consistent with the authorized standards of fill in 27 C.F.R. § 4.72; a nominal total height between 24.8 centimeters (9.75 inches) to 35.6 centimeters (14 inches); a nominal base diameter between 4.6 centimeters (1.8 inches) to 11.4 centimeters (4.5 inches); and a mouth with an outer diameter of between 25 millimeters (.98 inches) to 37.9 millimeters (1.5 inches); frequently referred to as a “wine bottle.” In scope merchandise may include but is not limited to the following shapes: Bordeaux (also known as “Claret”), Burgundy, Champagne, or Sparkling. In scope glass bottles generally have an approximately round base and have shapes including but not limited to, straight-sided, a tapered slope from shoulder (i.e., the sloping part of the bottle between the neck and the body) to base, or a long neck with sloping shoulders to a wider base. The scope includes glass bottles, whether clear or colored, with or without a punt (i.e., an indentation on the underside of the bottle), and with or without design or functional enhancements (including, but not limited to, embossing, labeling, or etching). In scope merchandise may be imported with or without a closure, including a cork, stelvin (screw cap), crown cap, or wire cage and cork closure. Excluded from the scope of the investigations are: (1) Glass containers made of borosilicate glass, meeting United States Pharmacopeia requirements for Type 1 pharmaceutical containers; (2) Glass containers produced by the “free blown” method or otherwise without the use of a mold (i.e., without “mold seams,” “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 cork, stelvin (screw cap), crown cap, or wire cage and cork closure). Glass bottles subject to the investigations are specified within the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 7010.90.5019. The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of the investigations is dispositive.
