US Starts Investigations on Polyester Textured Yarn Imported from China and India

November 12, 2018 Updated: November 12, 2018

Two major American synthetic yarn producers filed petitions that targeted the dumping of polyester textured yarn and unfair government subsidies from China and India. The petitions alleged harm to the U.S. domestic industry.

The petitions were filed by Unifi Manufacturing, Inc. and Nan Ya Plastics Corp. America on Oct. 18 with the U.S. International Trade Commission (ITC) and the U.S. Department of Commerce. The two federal bodies announced the initiation of antidumping duty and countervailing duty investigations on Nov. 8.

Antidumping duties are imposed on products sold at less than fair price or dumped in the United States. Countervailing duties are to compensate for unfair subsidies that are provided by foreign governments for particular products.

The plaintiffs allege that polyester textured yarn imports from China and India have been increasing aggressively in volume over the last five years, growing from approximately 38.4 million lbs in 2013 to 68.9 million lbs in 2017, an increase of approximately 79 percent.

Imports of polyester textured yarn in the U.S. market from 2015 through the first half of 2018 increased rapidly, from 61.7 million lbs in 2015 to 68.9 million lbs in 2017, growing approximately 11.5 percent over the three years ending in 2017. It expanded aggressively from 34.8 million pounds in the first half of 2017 to 41.7 million pounds in the first half of 2018, a year-on-year increase of 20.1 percent.

According to the petitions, importers in China and India are dumping polyester textured yarn in the U.S. market at large margins. The alleged dumping margins range from 74.98 to 77.15 percent for China and 35.14 to 202.93 percent for India.

The Department of Commerce is responsible for calculating dumping margins and collecting duties from importers. The investigation that began Nov. 8 aim to facilitate fair competition in the U.S. market by imposing antidumping and countervailing duties on imports of polyester textured yarn.

In the China countervailing duty investigation, Chinese polyester textured yarn manufacturers are alleged to benefit from 20 subsidy programs from the Chinese government, including low-priced inputs, preferential loans, grants, and income tax incentives. Indian polyester textured yarn producers are supported by 43 Indian government subsidy programs.

If the investigation by the Department of Commerce confirms the existence of dumping and unfair subsidies, and the ITC confirms that the imports have caused injury to the domestic polyester textured yarn industry, the Commerce Department will impose import duties.

“The substantial increase in unfairly-traded polyester textured yarn from China and India has harmed U.S. manufacturers and their workers,” said Paul Rosenthal of Kelley Drye & Warren LLP, counsel for the petitioning companies.

“Trade relief is essential to ensuring that the domestic polyester textured yarn industry can recover from its injured and vulnerable state, thrive, and fairly compete,” he said.

Polyester textured yarn is a synthetic multifilament yarn manufactured from polyester by a texturing process that adds special properties to the yarn filaments.