On October 31, 2018, JT&N assisted China’s PTFE industry in winning a complete victory in the anti-dumping investigation initiated by the US against the polytetrafluoroethylene resin (PTFE) products imported from China. Four members of the United States International Trade Commission (ITC) concluded based on the 4-0 voting result that China’s PTFE industry had not caused or threatened to cause substantial damages to the US.
The free-of-damage award will terminate the anti-dumping investigation, in which case, the US Customs will stop collecting the customs clearance deposits and the deposits already paid by Chinese exporters will be refunded in full.
Since President Donald John Trump came to power, this has been the second anti-dumping investigation initiated by the US against China that was concluded by rendering a free-of-damage award in favor of China. The first case concluded by rendering a free-of-damage award in favor of China was the anti-dumping and anti-subsidy investigation initiated by the US against the tires of trucks and passenger cars imported from China. These two cases have been handled by JT&N’s International Trade Relief Team.
This case has received strong support from the Trade Remedy and Investigation Bureau of China’s Ministry of Commerce, the Department of Commerce of Zhejiang Province, the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC), Zhejiang Juhua Group, and Shandong Dongyue Group. Its success is the result of the joint efforts of the Chinese governments, business associations, enterprises and lawyer teams.
Case review
Senior Partners Chen Yang and Zheng Xu are principal persons in charge of this case, and lawyer Yue Li is among other team members who also participated in the handling of this case.
On May 7, 2018, the US Department of Commerce published on the Federal Register the preliminary arbitration result of the anti-dumping investigation against PTFE products imported from China, affirming that the exporting of the PTFE products from China to the US market had constituted a dumping behavior, and that the dumping margin of Chinese enterprises was between 69.34% and 208.16%. Thereafter, American importers had to pay deposits at the primarily determined tax rates when going through the customs clearance procedures for PTFE products imported from China. On September 26, 2018, the US Department of Commerce issued the final award affirming the following tax rates:
Chinese exporters | Finally determined tax rate |
Daikin Fluorine Chemical industry (China) Co., Ltd. | 91.65% |
Shandong Dongyue Polymer Material Co., Ltd. | 54.41% |
Hangzhou Fine Fluorotech Co., Ltd. | 77.13% |
Shanghai 3F New Materials Technology Co., Ltd. | 77.13% |
Other Chinese enterprises not obtaining the separate rates | 218.88% |
The extremely high anti-dumping tax rates have put the US market of China’s PTFE industry in jeopardy.
In the face of such a disadvantage, China’s PTFE industry fought its way out in unity and spared no efforts to defend against the final damage judgment, in which case JT&N made the complete free-of-damage defense for and on behalf of China’s PTFE industry. After reviewing the damage investigation materials and the data on the American industry, the Chinese and American lawyer teams decided to adopt the following three litigation strategies:
1. Claiming that the ITC’s further subdivision of the US PTFE market indicates that PTFE products imported from China are not in the same market segment with those produced by the domestic industry in the United States, so Chinese products cannot cause damage to the American industry due to weak competition between them;
2. Pointing out that the supply capacity of the American industry is insufficient, and that Chinese products are a useful supplement to the US market and will not cause substantial damage to the American industry; and
3. Stressing that during the investigation, multiple economic indicators showed that the American industry witnessed good development and was not affected by products imported China.
Focusing on the above litigation strategies, JT&N and its American partners (Lawyer Team) successively submitted the final award questionnaire comments, pre-/post-hearing counterstatements and final comments and attended the ITC hearings held in Washington, D.C., USA, at which they stated their defense comments and used their best efforts to protect the interests of the Chinese industry.
Finally, the ITC supported the claims of the Lawyer Team by affirming that during the investigation, the supply capacity of the American industry was insufficient, and the quantity and price of products imported from China did not actually cause any adverse effect on the American industry and would not cause any adverse impact in the future; and that a number of economic indicators had been greatly improved during the investigation, indicating the healthy development of the American industry. All these show that PTFE products imported from China have neither caused substantial damage to the American industry nor posed any threat of such substantial damage.
Such a victory in the anti-dumping investigation not only has enabled the continual normal and smooth export from the Chinese industry to the US but also has minimized the adverse impacts caused by the investigation. In addition, in the context of the US’s frequent initiation of trade relief investigations against China, the victory in this anti-dumping investigation will also give the Chinese industry the confidence and determination to positively respond to and work together to defend against the anti-dumping investigation.
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