On March 31, 2020, a group of U.S. mattress producers, Brooklyn Bedding, Corsican Mattress Company, Elite Comfort Solutions, FXI, Inc., Innocor, Inc., Kolcraft Enterprises, Inc., Leggett & Platt, Inc., and union workers (Petitioners) filed antidumping (AD) and countervailing duty (CVD) petitions against Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, and Vietnam.
Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine not only that dumping or subsidization is occurring, but also that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.
The U.S. mattress producers recently petitioned and successfully argued for imposing an antidumping order on mattresses from China. This order went into effect in December 2019. Many of the Chinese imported mattresses were coming in through on-line bed-in-a-box suppliers offering ridiculously low prices. Based on the Petitioners’ petition information on such low price quotes from Chinese suppliers, the DOC calculated AD margins as high as 1,731.75%. Though it seems commercially impossible for anyone to be selling at a price well over a thousand times below the “fair” value, that AD rate was accepted by DOC as a valid AD margin using their standard non-market economy calculation methodology for products from China.
Although imports from China decreased after the filing of the first mattresses AD petition, a significant volume of mattresses are still being exported from China. So now Petitioners are seeking additional CVD duties to be imposed to counter the Chinese government subsidies that benefit the exported Chinese mattresses.
Also, after the first AD petition was filed, many of the Chinese producers moved quickly to set up new factories in neighboring countries. Petitioners therefore have filed these new petitions to try to stop the transplanted Chinese mattress operations that continue to crank out mattresses to the United States. Most of these other countries (except Vietnam) will be considered market economy countries, which means DOC’s dumping margin calculation theoretically should be lower than the margins calculated for China in the prior case. Because China is considered a non-market economy (NME), DOC does not accept the Chinese companies’ actual costs, and instead uses surrogate values from some other comparable market economy country. This NME methodology often leads to very high AD margins for Chinese products. Because these cases are filed on mattresses mostly from market economy countries, DOC will use the company’s actual costs and prices. So, the dumping margin calculations for this round should (at least theoretically) result in lower margins than those calculated for China. But the producers from these new subject countries will still have to report a ton of sales and cost data and comply with DOC’s detailed and exhaustive information requests. If they cannot satisfy all of DOC’s questionnaire requirements, they will likely be hit with the highest rates alleged in the petitions.
The petition identifies the merchandise to be covered by this AD/CVD investigation as all types of adult and youth mattresses. A “mattress” denotes an assembly of materials that at a minimum includes a “core” which provides the main support of the mattress, and may consist of innersprings, foam, other resilient filling, or a combination of these materials. Mattresses may also contain “upholstery,” the material between the core and the top/bottom panel of the ticking, and/or “ticking,” the outermost layer of fabric or other material (e.g., vinyl) that encloses the core and any upholstery, also know as a cover.
See here for the complete proposed scope definition from the petition.
Named Exporters/ Producers
Petitioner included a list of companies that it believes are producers and exporters of the subject merchandise. See attached mattress exporter/producer list.
Named U.S. Importers
Petitioner included a list of companies it believes are U.S. importers of the subject merchandise. See attached US Mattress Importer list.
Estimated Schedule of Investigations.
March 31, 2020 – Petitions filed
April 20, 2020 – DOC initiates investigation
April 21, 2020 – ITC Staff Conference
May 15, 2020 – ITC preliminary determination
August 28, 2020 – DOC CVD preliminary determination (assuming extended deadline) (6/24/20 – unextended)
October 27, 2020 – DOC AD preliminary determination (assuming extended deadline) (9/7/20 – unextended)
March 11, 2021 – DOC final determination (extended and AD/CVD aligned)
April 25, 2021 – ITC final determination (extended)
May 2, 2021 – DOC AD/CVD orders issued (extended)