On October 12, 2022, the Coalition of Domestic File Manufacturers, a U.S. industry trade group comprised of Smead Manufacturing Company, Inc. and TOPS Products LLC., filed a petition with the U.S. Department of Commerce (DOC) and the United States International Trade Commission. (ITC) alleging that paper file folders (PFF) from China, India and Vietnam are being sold in the United States at less than fair value. The petition also alleges that the Indian government provides unfair subsidies to its producers and exporters of PFF to the United States.

The companies seek the imposition of anti-dumping (AD) duties on imports of PFF from China, India and Vietnam, alleging margins of dumping ranging from 84.51% to 202.26% for China, 120.50% to 227.88% for India and 182.67% to 236.38% for Vietnam. . The companies are also seeking the imposition of countervailing duties (CVD) on imports of PFF from India, alleging an unspecified total level of subsidy greater than 1%.

Under U.S. law, a domestic industry can request the government to initiate an anti-dumping investigation to determine whether an imported product is being sold in the United States for less than its fair value (i.e. being dumped). A domestic industry may also request a countervailing duty investigation into alleged subsidization of foreign producers or exporters by a foreign government. Anti-dumping/countervailing duties may be imposed if the DOC determines that the imported goods are being dumped and/or unfairly subsidized and if the ITC determines that the domestic industry is materially injured or threatened with material injury. such injury by reason of subject imports.

Products covered by the petition The products covered by the petition are file folders made primarily of paper, cardboard, pressboard or other cellulosic material, coated or uncoated, which has been folded (or crumpled for the purpose of folding), glued, taped, bound or otherwise assembled to be fit to contain documents. The scope includes all such shirts, regardless of color, whether stretchable or not, with or without tabs, fasteners, closures, hooks, rods, hangers, pockets, gussets or internal dividers.

The folders covered by the petition, which are generally used to hold letter and legal size documents, have the following dimensions in their folded and closed position, a length and width of at least 8 inches and not more than 17 inches, without any requirement in terms of depth.

The petition covers all varieties of folders including, but not limited to, manila folders, hanging folders, zipper folders, classification folders, expandable folders, pocket folders, jackets and wallets.

The following products are not affected by the petition:

  • flap mailing envelopes bearing one or more adhesive strips which can be used permanently to seal the entire length of one side so that when sealed the folder is closed on all four sides
  • binders, with two or more rings to hold documents in place, made from cardboard or pressed board fully wrapped in plastic
  • non-stretch folders that are deeper than 7 inches and closed or can be closed at the top, bottom and on all four sides (for example, boxes or cartons)
  • fashion shirts, which are defined as shirts having all of the following characteristics: (1) plastic lamination covering the entire exterior of the shirt; (2) imprinted, hot stamped, embossed (i.e. raised embossed designs that are indented on the opposite side) and/or debossed (i.e. indented embossed designs which are embossed on the opposite side), covering the entire outer surface of the backrest; (3) at least two distinct and visible printed or embossed colors other than the color of the base paper and other than the printing of numbers, letters, words or logos, each separately covering at least 10% of the whole outer surface; and (4) patterns, pictures, designs or illustrations covering at least thirty percent of the outer surface of the shirt
  • portfolios, which are folders having (1) a width of at least 16 inches when opened flat, (2) without tabs or dividers, and (3) one or more pockets adapted to hold documents of letter and which cover at least 15% of the surface of the interior side(s) concerned, and
  • report covers, which are folders having (1) no tabs, dividers, or pockets, and (2) one or more fasteners or clips, each of which is permanently attached to the center fold, to hold the papers securely in place.

The products subject to the petition are listed in Harmonized Tariff Schedule of the United States (HTSUS) subheading 4820.30.0040 and may appear in other HTSUS subheadings, including 4820.30.0020.

The total value of U.S. imports of PFF from China, India, and Vietnam was $49.7 million in 2021.

Foreign producers and U.S. importers of PFF The petition identifies 66 US exporters and 69 US importers of PFF from China, India and Vietnam. See the petition’s lists of exporters and importers.

Provisional schedule of investigations AD and CVD procedures are conducted according to a strict legal schedule. Below is an estimated timeline for anti-dumping and countervailing investigations on PFFs from China, India and Vietnam.

10/12/2022 – Petition filed

11/28/2022 – ITC Preliminary Injury Determination

01/05/2023 – DOC preliminary countervailing duty determinations, if not deferred

03/13/2023 – DOC preliminary countervailing duty determinations, if fully deferred

03/21/2023 – DOC preliminary anti-dumping determinations, if not deferred

05/10/2023 – DOC preliminary anti-dumping determinations, if fully deferred

09/29/2023 – DOC AD and CVD Final Determinations, if Preliminary and Final Determinations fully postponed

11/13/2023 – ITC’s Final Injury Determination, if DOC’s Determinations Fully Deferred and DOC’s Final Determinations Are Aligned

20/11/2023 – Publication of the AD and CVD orders

Implications for US Exporters and Businesses US anti-dumping and countervailing investigations may result in the imposition of substantial duties in addition to the duties and tariffs already applicable. If the ITC and DOC issue affirmative preliminary rulings, U.S. importers will be required to file cash deposits equal to the ad valorem anti-dumping and/or countervailing duty rates determined for the subject merchandise from the date the DOC’s preliminary determination is published in the Federal Register. In certain circumstances, these filing requirements may become effective retroactively 90 days prior to the date of publication. Anti-dumping and countervailing duties will remain in effect if DOC and ITC issue affirmative final determinations.

The DOC calculates specific anti-dumping and countervailing margins for certain individual foreign producers and exporters selected for review. These rates are often much lower than those alleged in the petition. However, foreign producers and exporters that do not participate in the investigations may be subject to significantly higher rates. Duties imposed at these higher rates may force exporters to stop shipping to the United States and importers to stop importing the subject goods. Thus, interested parties – including U.S. and foreign producers, exporters, importers, and U.S. downstream purchasers of subject merchandise – are encouraged to have a strategy for dealing with anti-dumping and countervailing investigations, including possible participation.

Under the statutory schedule for anti-dumping and countervailing investigations, the first determination (i.e. the ITC’s preliminary determination of whether there is a reasonable indication that the US industry is suffering injury material or threatens material injury by reason of subject imports) must be made within 45 days of the filing of the petition – in this case, before November 28, 2022. An ITC hearing (i.e. say a public lecture) takes place approximately 21 to 23 days after the filing date. As a result, the work of agency staff, including sending questionnaires to interested parties, begins almost immediately. Thus, rapid action is encouraged to understand the specific implications of these developments as well as to prepare and implement a relevant strategy.