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US Investigates Illegal Import Charges on Polyester Yarn From China, India

The U.S. Commerce Department has launched investigations to determine whether polyester textured yarn from China and India is being dumped on the U.S. market, and if producers in those countries are receiving unfair subsidies.

The antidumping duty (AD) and countervailing duty (CVD) investigations were initiated following petitions filed last month by Greensboro, N.C.-based Unifi Manufacturing Inc., and Nan Ya Plastics Corp. America of Lake City, S.C.

As part of the AD investigation, the Commerce Department is looking into whether imports of polyester textured yarn from China and India are being sold in the U.S. market at less than fair value, and are therefore creating unfair competition. The alleged dumping margins for China and India range from 74.98 percent to 77.15 percent, and 35.14 percent to 202.93 percent, respectively. The margin is defined as the amount by which the export price is below market value, which makes these numbers substantial.

Meanwhile, the CVD investigation is seeking to determine whether Chinese and Indian producers of polyester textured yarn are receiving unfair government subsidies. There are 20 subsidy programs under review in the China CVD investigation, including those allegedly providing low-priced inputs and preferential loans and grants, as well as income tax incentives. In the India CVD case, 43 subsidy programs are under review, including tax incentives, provision of low-priced inputs, and grants and loan subsidies.

If Commerce makes affirmative findings in these investigations and the U.S. International Trade Commission (ITC) determines dumped or unfairly subsidized U.S. imports of polyester textured yarn from the countries are causing injury to U.S. industry, the agency will impose duties on those imports in an amount to make up for the dumping or unfair subsidization.

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In 2017, imports of polyester textured yarn—a synthetic multifilament produced through a texturing process that gives special properties to the filaments of the yarn—from China and India were valued at an estimated $35 million and $19.6 million, respectively.

While the Commerce department investigates whether polyester textured yarn from China and India is being dumped and unfairly subsidized, ITC will conduct its own investigations into whether U.S. industry and its workforce are being harmed as a result. The ITC will make its preliminary determinations on or before Dec. 3. If the ITC preliminarily determines there has been injury to the U.S. market, or the threat of it exists, then investigations will continue, with the preliminary CVD determinations scheduled for Jan. 11 and preliminary AD determinations scheduled for March 27.

A positive determination will require U.S. Customs and Border Protection to start collecting cash deposits from all U.S. companies importing polyester textured yarn from China and India. If Commerce finds these products are not being dumped or unfairly subsidized, or the ITC finds there is no harm to U.S. industry, then the investigations will be terminated and no duties will be applied.

Laws against anti dumping and countervailing duties provide U.S. companies a means for seeking relief from the effects of unfairly priced imports. Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties. Companies that receive unfair subsidies from their governments, such as grants, loans, equity infusions, tax breaks or production inputs, are subject to countervailing duties aimed at directly countering those subsidies.