IMPORT SENSITIVE PRODUCTS AND NEW 337 CASES

Commerce Department After the Snow Pennsylvania Avenue WashingtoIMPORT SENSITIVE PRODUCTS

Over the last several years, because of my international trade expertise, many US importers have called me because they wake up one morning and find they are liable for antidumping (“AD”) and countervailing duties (“CVD”) on a number of different products.  These duties can be in the millions of dollars, when the importers simply did not know that the imported products were covered by US AD and CVD orders.  One unfortunate fact is that US importers, companies that import products into the United States, are liable for AD and CVD on imports and they can be retroactively liable.

This post highlights the breadth of products currently subject to antidumping and countervailing duty orders and it thus should serve as a warning to anyone in the United States who imports products from China.

If you were an importer of a solar recharger for an RV unit, for example, would you know that the product is covered by the US AD order on solar cells from China?  If you were importing curtain walls/the sides of buildings, auto parts, geodesic domes, and lighting equipment, would you know that the products were covered by US AD and CVD orders against aluminum extrusions?

In fact, the US presently has more than 130 AD and CVD orders against China and 100s of AD and CVD orders against imports from other countries.  The Chinese AD and CVD orders block more than $30 billion in imports, and those AD and CVD orders can stay in place for 5 to 30 years.  The orders can also expand to cover downstream products, such as curtain walls, certain solar cell consumer products, and gardening equipment.

With regards to China, more than 80 of the AD and CVD orders are against raw materials, chemicals, metals and various steel products, used in downstream US production.  In the Steel area, there are AD and CVD orders against the following Chinese steel products:

carbon steel plate, hot rolled carbon steel flat products, circular welded and seamless carbon quality steel pipe, rectangular pipe and tube, circular welded austenitic stainless pressure pipe, steel threaded rod, oil country tubular goods, steel wire strand and wire, high pressure steel cylinders, non-oriented electrical steel, and carbon and certain alloy steel wire rod.

There are ongoing investigations against cold-rolled steel and corrosion resistant/galvanized steel so almost all Chinese steel products from China are blocked by US AD and CVD orders.

In addition to steel, other metal products, such as silicomanganese, metallurgical coke, magnesium, silicon metal, and graphite electrodes, which are used in downstream steel production, are also blocked by AD orders.  Electrolytic Manganese Dioxide used to produce batteries is also covered, which led Panasonic to close its US battery factory and move to China.  The Magnesium AD orders have led to the destruction of the US Magnesium Dye Casting industry and the movement of light weight auto parts production to Canada.

In addition to steel and metal products, chemical products, such as sulfanilic acid, polyvinyl alcohol, barium carbonate, potassium permanganate, activated carbon, glycine, isocyanurates/swimming pool chemicals, xanthan gum, citric acid, and calcium hypochlorite, are covered by orders.  The AD order on sulfanilic acid led to the injury of the US optical brightening industry, which brought its own antidumping case against China.

In addition to raw materials, however, many household products are covered by AD and CVD orders, including ironing tables, steel sinks, wood flooring, wooden bedroom furniture, steel shelving, and steel cooking ware.  Other consumer products covered are: tires, hand trucks, lawn groomers, steel nails, paper clips, pencils, ribbons, candles, paper products, gift wrap and heavy forged hand tools.

In addition to household products, food products, such as shrimp, honey, crawfish and garlic, are covered by AD orders against China and other countries.

At this point in time, any product being imported from China is at least somewhat import sensitive and could well be attacked by US trade actions.  This means that an importer should monitor the products it imports for any potential trade sanctions. And if you the importer are hit with sanctions, know that in contrast to other legal statutes, the AD and CVD law are remedial statutes so you can request an antidumping or countervailing duty review investigation to get the rates reduced and with that your own liability for past imports.

NEW SECTION 337 INTELLECTUAL PROPERTY CASES FILED AT ITC AGAINST CHINA

On June 22, 2016,  Schutz Container Systems Inc. filed a section 337 IP case at the US International Trade Commission (“ITC”) against Composite Intermediate Bulk Containers.  The proposed respondent is Zhenjiang Runzhou Jinshan Packaging Factory, China.

On June 24, 2016, Excel Dryer, Inc. filed a section 337 IP case at the ITC against Hand Dryers and Housings for Hand Dryers.  The proposed respondents, including Chinese companies, are: ACL Group (Intl.) Ltd, United Kingdom; Alpine Industries Inc., Irving, New Jersey; FactoryDirectSale, Ontario, CA; Fujian Oryth Industrial Co., Ltd. (a/k/a Oryth), China; Jinhua Kingwe Electrical Co. Ltd., (a/k/a Kingwe), China; Penson & Co., China; Taizhou Dihour Electrical Appliances Co., Ltd. a/k/a Dihour, China; TC Bunny Co., Ltd., China; Toolsempire, Ontario, CA; US Air Hand Dryer, Sacramento, CA; Vinovo, China; and Zhejiang Akie Appliance Co., Ltd., China.

On July 5, 2016, The Chamberlain Group Inc. filed a section 337 case at the ITC against Access Control Systems.  The proposed respondents, including a Chinese company, are: Techtronic Industries Co. Ltd, Hong Kong; Techtronic Industries North America, Inc., Hunt Valley, Maryland; One World Technologies Inc., Anderson, South Carolina; OWT Industries Inc., Pickens, South Carolina; Ryobi Technologies Inc., Anderson, South Carolina; and Et Technology (Wuxi) Co., Ltd., China.

If you have any questions about these cases or about the antidumping or countervailing duty law, US trade policy, trade adjustment assistance, customs, or 337 IP/patent law in general, please feel free to contact me.

Best regards,

Bill Perry

DEVELOPMENTS–TRADE, CUSTOMS/TARIFFS, 337/IP/PATENT, DRYWALL PRODUCT LIABILITY, ARBITRATION

Zhengyang Gate from Walking Street Tiananmen Square Beijing Chin There have been major developments in the Trade, Customs, 337/IP, Patent, Products Liability and Arbitration areas.

TRADE DEVELOPMENTS

SHRIMP FROM CHINA, VIETNAM, INDIA AND OTHER COUNTRIES

A new countervailing duty case has been filed against Shrimp from China and a number of other countries.  See the announcement below.  If anyone wants a copy of the complaint, please feel free to contact me.

Docket No: 2928 

Document Type: 701 Petition

Filed By: Elizabeth J. Drake

Firm/Org: Stewart and Stewart

Behalf Of: Coalition of Gulf Shrimp Industries (COGSI)

Date Received: December 28, 2012

Commodity: Frozen Warmwater Shrimp

Country: People’s Republic of China, Ecuador, India, Indonesia, Malaysia, Thailand, and the Socialist Republic of Vietnam

Description: Letter to Lisa R. Barton, Secretary, USITC; requesting the Commission to conduct an investigation under section 701 of the Tariff Act of 1930 regarding the imposition of countervailing duties on U.S. imports of Certain Warmwater Shrimp from the People’s Republic of China, Ecuador, India, Indonesia, Malaysia, Thailand, and the Socialist Republic of Vietnam.

Status: 701-TA-491-497

XANTHAN GUM FROM CHINA–COMMERCE DEPARTMENT PRELIMINARY ANTIDUMPING DETERMINATION

Today, the Commerce Department announced its preliminary antidumping duty determination in the Xanthan Gum from China.  Fufeng Biotechnologies Co., Co., Ltd.  received 21.69% and Deosen Biochemical Ltd. 127.65%.  The separate rate companies received 74.67%, and the rate for the rest of China is 154.07%.

Attached are the preliminary Federal Register notice and fact statement. Xanthan Gum Prelim FR (signed)  Xanthan Gum FS Prelim

CURTAIN WALL DECISION APPEALED TO THE COURT OF INTERNATIONAL TRADE

The Commerce Department’s decision to extend the Aluminum Extrusions antidumping and countervailing duty orders to cover imports of Chinese curtain wall/sides of buildings has been appealed to the Court of International Trade.  See the attached complaint.  Complaint and Aluminum Extrusion and Curtain Wall (2)

WOODFLOORING REVIEW INVESTIGATION STARTS UP

The US wood flooring industry has requested an antidumping and countervailing duty review investigation of numerous Chinese exporters.  If anyone wants a list of the Chinese companies named in the letter, please feel free to contact me.

CHINESE ANTIDUMPING AND COUNTERVAILING DUTY ON PULP FROM THE US, CANADA AND BRAZIL

Possibly in response to the numerous US cases against Chinese wood products, we have learned that the Chinese government is on the verge of initiating a major antidumping case against imports of wood pulp, cotton pulp, and bamboo pulp from the US, Canada and Brazil.  If anyone wants a copy of the target companies in the US, Canada or Brazil, please feel free to contact me.

CUSTOMS—NEW TARIFF BILL

On January 1, 2013, The House of Representatives introduced this week a major tariff reduction bill, The U.S. Job Creation and Manufacturing Competitiveness Act of 2013.  Attached is a copy of the bill, which must still go to the Senate.  TARIFF BILL  The bill represents a bipartisan effort to lower costs for US manufacturers by lowering tariff rates to zero on hundreds of products, including numerous chemical products.  Since both Republicans and Democrats sponsor the bill, it will pass the House.  According to the attached announcement by the House Ways and Means Committee, the Senate Finance Committee has reviewed the same proposals in the House Bill so this bill should eventually pass the Senate and go to the President for his signature.  HOUSE ANNOUNCEMENT

 NEW 337 PATENT CASE AGAINST HUAWEI AND ZTE

On January 2, 2013, a new 337 patent case was filed at the International Trade Commission against Huawei and ZTE.  See notice below.

Docket No: 2929 

Document Type: 337 Complaint

Filed By: Bert C. Reiser

Firm/Org: Latham and Watkins

Behalf Of: Inter Digital Communications, Inc., Inter Digital Technology Corporation, IPR
Licensing, Inc. and Inter Digital Holdings, Inc.

Date Received: January 2, 2013

Commodity: Wireless Devices with 3G and/or 4G Capabilities and Components

Description: Letter to Lisa R. Barton, Acting Secretary, USITC; requesting that the Commission conduct an investigation under section 337 of the Tariff Act of 1930, as amended regarding Certain Wireless Devices with 3G and/or 4G Capabilities and Components Thereof . The proposed respondents are Samsung Electronics Co., Ltd., Korea; Samsung Electronics America, Inc., Ridgefield Park, NJ; Samsung Telecommunications America, LLC, Richardson, TX; Nokia Corporation, Finland; Nokia Inc., White Plains, NY; ZTE Corporation, China; ZTE (USA) Inc., Richardson, TX; Huawei Technologies Co., Ltd., China; Huawei Device USA, Inc., Plano, TX; and Future Wei Technologies, Inc., d/b/a Huawei Technologies (USA), Plano, TX.

Status: Pending Institution

If anyone wants a copy of the complaint, please feel free to contact me.

MORE PATENT CASES AGAINST HUAWEI AND ZTE

Attached are the companion complaints filed in Federal District Court by Interdigital against Huawei and ZTE.  INTERDIGITAL HUAWEI INTERDIGITAL ZTE

In addition, Steelhead Licensing has filed a new patent case against ZTE.  See attached complaint.  STEELHEAD ZTE 

 DRYWALL PRODUCTS LIABILITY LEGISLATION

On Tuesday, January 1, 2013, the House of Representatives passed legislation banning the sale of contaminated drywall imported from China.  In the bill, Congress insisted that the Chinese government force Chinese manufacturers to compensate American homeowners who have faced property damage and health problems caused by the tainted product.

The U.S. House of Representatives voted 378-37 in favor of the Drywall Safety Act.  On December 21, 2012, the same bill went through the US Senate on a unanimous, 100 to 0, vote so the bill is on President Obama’s desk for signature.

The bill stipulates that contaminated drywall be treated as a banned hazardous substance under the Federal Hazardous Substances Act and as an imminent hazard under the Consumer Product Safety Act. 

Attached is a copy of the bill going to the President for signature.  US LEGISLATION

Section 2 of the Bill reads as follows:

SEC. 2. SENSE OF CONGRESS.

“It is the sense of Congress that—

(1)  the Secretary of Commerce should insist that the Government of the People’s Republic of China, which has ownership interests in the companies that manufactured and exported problematic drywall to the United States, facilitate a meeting between the companies and representatives of the United States Government on remedying home owners that have problematic drywall in their homes;

and

(2)  the Secretary of Commerce should insist that the Government of the People’s Republic of China direct the companies that manufactured and exported problematic drywall to submit to jurisdiction in United States Federal Courts and comply with any decisions issued by the Courts for home owners with problematic drywall.”

As mentioned in a previous post on this blog, there is a major multidistrict litigation, which includes 10,000 or more cases ongoing in the Eastern District of Louisiana.  Recently, in September, the Court rejected an effort by a Chinese company to lift a default judgment in the case and the Court found jurisdiction over the Chinese company.

One Chinese drywall manufacturer Knauf Plasterboard Tianjin Co., a subsidiary of a German company, in December 2011 settled the personal injury and other claims in a settlement worth between $800 million and $1 billion. This settlement covers about 4,500 homes.

ENFORCEMENT OF ARBITRATION AWARD BY CHINESE COMPANY AGAINST US COMPANY

Attached is a complaint filed January 2, 2013 by Chongqing Hengsheng Xintai Trade Co., Ltd. against Baja, Inc. a/k/a Baja Motorsports, LLC, a Delaware Corp., in the US District Court of South Carolina seeking to enforce an arbitration award from the China International Economic and Trade Arbitration Commission (“CIETAC”) against a US company.  CHONGQING CIETAC AWARD COMPLAINT

If anyone wants any information about these complaints, developments or general information on US Trade, Customs, antitrust, securities, products liability or arbitration law, please feel free to contact me. 

Best regards,

Bill Perry

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