Fine Denier Polyester Staple Fiber

SUPPLEMENTARY INFORMATION:

Procedural summary: On February 28, 2024, the Commission instituted this investigation under section 202(b) of the Trade Act of 1974 (19 U.S.C. 2252(b)) to determine whether fine denier polyester staple fiber (“fine denier PSF”) is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article. The Commission instituted the investigation in response to a petition filed on February 28, 2024, by Fiber Industries LLC d/b/a Darling Fibers, Nan Ya Plastics Corporation, America, and Sun Fiber LLC, producers of fine denier PSF in the United States.

Notice of the institution of the Commission's investigation and of the scheduling of public hearings to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register (89 FR 18435 (March 13, 2024)). The public hearing in connection with the injury phase of the investigation was held on June 4, 2024, in Washington, DC, and the public hearing in connection with the remedy phase of the investigation was held on July 23, 2024, in Washington, DC; all persons who requested the opportunity were permitted to participate. The Commission voted with respect to injury issues on July 9, 2024, and with respect to remedy issues on August 13, 2024.

The Commission submitted its report to the President on August 26, 2024. The report included the Commission's injury determination and remedy recommendations, an explanation of the basis for the determination and remedy recommendations, and a summary of the information obtained in the investigation.

Section 202(f)(3) of the Trade Act of 1974 (19 U.S.C. 2252(f)(3)) requires that the United States International Trade Commission (“Commission”) publish in the Federal Register a summary of each report that it submits to the President under section 202(f)(1) of the Trade Act of 1974.

Determination: On the basis of information developed in the subject investigation, the Commission determined pursuant to section 202(b) of the Trade Act of 1974 that fine denier PSF is being imported into the United States in such increased quantities as to be a substantial cause of serious injury to the domestic industry producing an article like or directly competitive with the imported article.

Having made an affirmative injury determination pursuant to section 202(b) of the Trade Act of 1974, the Commission was required to make certain additional findings under the implementing statutes of certain free trade agreements (“FTAs”) or under statutory provisions related to certain preferential trade programs. Under section 301(a) of the United States-Mexico-Canada (“USMCA”) Implementation Act (19 U.S.C. 4551(a)), the Commission found that imports of fine denier PSF from neither Canada nor Mexico account for a substantial share of total imports or contribute importantly to the serious injury caused by imports. The Commission further found that imports of fine denier PSF from Australia, the U.S.-Dominican Republic—Central America Free Trade Agreement (“CAFTA DR”) countries, Colombia, Jordan, South Korea, Panama, Peru, and Singapore, individually, are not a substantial cause of serious injury or threat thereof, under the relevant FTA implementing statutes. See19 U.S.C. 2112 note (Jordan); 19 U.S.C. 3805 note (Australia, Colombia, South Korea, Panama, Peru, Singapore); 19 U.S.C. 4101 (CAFTA-DR). The Commission also found that the serious injury substantially caused by imports to the domestic industry producing a like or directly competitive article does not result from the reduction or elimination of any duty provided for under the U.S.-Israel Free Trade Agreement or from duty-free treatment provided for under the Caribbean Basin Economic Recovery Act (“CBERA”) provisions of the Caribbean Basin Initiative Trade Program or the Generalized System of Preferences (“GSP”) program. See19 U.S.C. 2112 note (Israel); 19 U.S.C. 2703(e) (CBERA); 19 U.S.C. 2253(e)(6) (GSP).

Remedy recommendations. In order to address the serious injury to the domestic industry producing fine denier PSF and be most effective in facilitating the efforts of the domestic industry to make a positive adjustment to import competition, the Commission recommends several actions.

The Commission unanimously recommends a four-year period of relief. It also unanimously recommends that a quantitative restriction (“QR”), to be set at zero in the first year of relief increasing by one million pounds in each subsequent year over the duration of the safeguard, be imposed on imports of fine denier PSF entered free under bond as articles to be processed for export under the Temporary Importation under Bond (TIB) program. All Commissioners additionally recommend a tariff-rate quota (“TRQ”) be imposed on imports of fine denier PSF from all countries covered by their affirmative injury determination.

Commissioners Johanson and Schmidtlein recommend a TRQ with an in-quota volume level of 145,000,000 pounds (inclusive of any imports of the article under HTS statistical reporting number 9813.00.0520), with an in-quota tariff rate of 15 percent ad valorem and an out-of-quota tariff rate of 40 percent ad valorem. They recommend that the in-quota tariff rate decrease by 1 percentage point and the out-of-quota tariff rate decrease by 2 percentage points, in each subsequent year of the four-year relief period. Commissioners Johanson and Schmidtlein recommend that any imports of the article under HTS statistical reporting number 9813.00.0520 entered after the tariff-rate quota has filled for the year would be subject to the over-quota duty rate.

Chair Karpel recommends a TRQ with an in-quota volume level of 114,820,000 pounds, with an in-quota tariff rate of 15 percent ad valorem and an out-of-quota tariff rate of 45 percent ad valorem. Chair Karpel recommends that the in-quota and out-of-quota tariff rates decrease by 1 percentage point in each subsequent year of the four-year relief period. Chair Karpel recommends that the TRQ's in-quota volume level is inclusive of any imports of fine denier polyester staple fiber under HTS subheading 9813.00.05.

Commissioner Kearns recommends a TRQ with an in-quota volume level of 110,000,000 pounds (inclusive of any imports of the article under HTS statistical reporting number 9813.00.0520, with the exception of imports from countries that were not covered by the Commission's injury determination), with an in-quota tariff rate of 22 percent ad valorem in the first year, reduced to 20 percent ad valorem in the second and third years, and reduced to 18 percent ad valorem in the fourth year. Commissioner Kearns recommends an out-of-quota tariff rate of 50 percent ad valorem, reduced by three percentage points in each subsequent year of the four-year relief period. Commissioner Kearns recommends that fine denier PSF imported under HTS statistical reporting number 9813.00.0520, with the exception of TIB entries from the FTA and trade preference countries that were not covered by the Commission's injury determination, be subject to the in-quota and out-of-quota tariff rates.

Having made negative findings with respect to imports from Canada and Mexico under section 302 of the USMCA Implementation Act, and having made findings that imports from Australia, the CAFTA-DR countries, Colombia, Israel, Jordan, Panama, Peru, Singapore, South Korea, and the beneficiary countries under the Caribbean Basin Economic Recovery Act were not a substantial cause of the serious injury experienced by the domestic industry, the Commission recommends that the President exclude such countries from any form of the TRQ.

All Commissioners recommend that the QR imposed on imports of fine denier PSF entered under TIB under HTS statistical reporting number 9813.00.0520 apply to imports from all countries for which they recommend application of the TRQ. Chair Karpel and Commissioner Schmidtlein recommend that the QR also apply to imports from South Korea. Commissioner Kearns recommends that the QR be applied to all countries, including South Korea.