April 23, 2014

Your Shipping Containers Could Get A Lot More Expensive

By Douglas J. Heffner and Richard P. Ferrin

For your information, on April 23, 2014, a petition was filed asking the U.S. government to investigate whether Chinese imports of 53-foot domestic dry containers are being unfairly dumped and subsidized.  The U.S. antidumping (AD) law imposes special tariffs to counteract imports that are sold in the United States at less than “normal value.”  The U.S. countervailing duty (CVD) law imposes a different set of special tariffs to counteract imports that benefit from unfair foreign government subsidies.  For both antidumping and countervailing duties to be imposed, the U.S. government must determine not only that dumping and/or subsidization is occurring, but also that there is harm to the U.S. industry by reason of the dumped and/or subsidized imports.

The petition was brought by Stoughton Trailers LLC (Stoughton), which alleges that low-priced dumped and subsidized Chinese imports are preventing it from re-establishing its U.S. production of 53-foot domestic dry containers.  Stoughton estimates that the Chinese imports are being dumped at a margin of approximately 90 percent, based on a comparison of the U.S. price to normal value.  If the U.S. government confirms this figure, U.S. Customs and Border Protection would impose a 90 percent special antidumping duty on all Chinese imports of this product.  Additional duties to counteract unfair subsidization are not quantified in the petition, but Stoughton alleges that they are substantial.  Under U.S. law, importers of the 53-foot dry containers are liable for additional AD and CVD duties.  In addition, if significant AD and CVD duties are imposed, it could severely disrupt the supply of these products for companies that purchase or lease these types of containers.

These investigations are administered by two U.S. government agencies, the Department of Commerce (DOC) and the International Trade Commission (ITC).  The ITC must make a preliminary determination on the harm issue by June 9, 2014.  The DOC must make a preliminary CVD determination no later than July 17, 2014, and a preliminary AD determination by September 30, 2014, although both DOC deadlines could be postponed.  Importers could be liable for potential AD and CVD duties beginning the date that the preliminary determinations are published in the Federal Register.  The entire investigation process takes approximately one year to complete.  If the DOC imposes AD and CVD duty orders, final duties are determined approximately two years later.

Please let us know if you would like further information regarding the new petition.  

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