The U.S. Department of Commerce has found that polyester exporters from China and India were receiving illegal subsidies, and U.S. Customs and Border Protection will begin collecting duties to recover those subsidies.
On Monday the Commerce Department issued affirmative preliminary determinations in the countervailing duty (CVD) investigations of imports of polyester textured yarn from China and India. After an investigation, the agency found that exporters received illegal subsidies ranging from 32.04 percent to 459.98 percent from China, and 7.09 percent to 20.45 percent from India. The duties set to be collected will be in the amount equal to the subsidy rates for imports from each country.
The investigation was conducted after polyester makers Unifi Manufacturing Inc. of Greensboro, N.C., and Nan Ya Plastics Corp. America of Lake City, S.C., petitioned for relief from the subsidized imports in October. Their petition was based on U.S. law that makes it illegal for foreign companies to price their products in the U.S. market below the cost of production or below prices in their home markets, which make them subject to antidumping duties. Companies that receive unfair subsidies from their governments, in the form of grants, loans, equity infusions, tax breaks or production inputs, are subject to countervailing duties aimed at countering those subsidies.
In 2017, imports of polyester textured yarn from China were valued at an estimated $35 million, and imports from India at $19.6 million. Polyester textured yarn is produced through a texturing process that gives special properties, including stretch, bulk, strength, moisture absorption, insulation and the appearance of a natural fiber.
In the China investigation, Commerce assigned preliminary subsidy rates of 32.04 percent to Fujian Billion Polymerization Fiber Technology Industrial Co., and 459.98 percent to Suzhou Shenghong Garment Development Co. and Suzhou Shenghong Fiber Co. and their cross-owned companies, including Jiangsu Shenghong Textile Imp & Exp Co. and its successor, Jiangsu Huahui Import and Export Co. The preliminary subsidy rate for all other Chinese producers and exporters was set at 32.04 percent.
In the India investigation, Commerce assigned a preliminary subsidy rates of 20.45 percent to JBF Industries and 7.09 percent to Reliance Industries. The preliminary subsidy rate for all other Indian producers and exporters is 13.82 percent.
Commerce will now instruct U.S. Customs & Border Protection to collect cash deposits from importers of polyester textured yarn from China and India based on these preliminary rates. Commerce is scheduled to announce its final CVD determinations on or about Sept. 10. If Commerce makes affirmative final determinations, the U.S. International Trade Commission (ITC) is scheduled to make its final injury determinations on or about Oct. 24.
If both agencies make affirmative final determinations in these investigations, importers would then have to pay the additional duties at the preliminary dumping rates, Commerce Department said.