Imported Paper Shopping Bags Under Scrutiny by the US Department of Commerce
On May 31, 2023, the Coalition for Fair Trade in Shopping Bags submitted antidumping (AD) and countervailing (CVD) petitions to the US Department of Commerce for imports of paper shopping bags.
These petitions claim that certain countries are believed to be unfairly subsidizing the production of paper shopping bags, which is harming or poised to harm the US industry producing similar products.
On December 28, 2023, the United States International Trade Commission (USITC) announced affirmative preliminary determinations in the Antidumping Duty (AD) investigations of certain paper shopping bags.
This article covers everything you need to know about the petitions brought against the paper bag import market while providing guidance on how you can navigate this complex situation successfully.
What Are Antidumping and Countervailing Duty Laws Under the Tariff Act of 1930?
The Tariff Act of 1930 introduced Antidumping and Countervailing Duty Laws as mechanisms to counterbalance the effects of unfairly priced or subsidized imports on domestic industries.
Antidumping (AD) and countervailing (CVD) petitions offer a legal pathway for US manufacturers to challenge the price of imported products that are seemingly below the cost of goods, thereby undercutting US manufacturers’ ability to sustain market share.
Through AD and CVD petitions, industries can protect themselves from overseas competitors who employ unjust trade tactics.
Why Have Antidumping and Countervailing Petitions Been Submitted for Imports of Paper Shopping Bags?
The antidumping (AD) and countervailing (CVD) petitions claim a significant surge of 74% in paper shopping bag imports from nine countries in recent years due to unfair pricing.
This move echoes actions taken in 2004 when AD duties (tariffs and taxes) were placed on polyethylene retail carrier bags imported from several Asian countries, including China, Malaysia, Thailand, Indonesia, Taiwan, and Vietnam, alongside CVD measures on similar imports from Vietnam.
What Are the Potential Outcomes for the Paper Bag Import Market?
If the United States International Trade Commission (USITC) finds sufficient evidence to back these petitions, an antidumping (AD) or countervailing duty (CVD) order is issued.
Companies that import paper shopping bags will face increased costs due to the imposed duties, which could make imports less competitive in the US market. The term “duties” refers to taxes or tariffs imposed on paper bag imports if these AD and CVD petitions are successful.
This may lead companies that import paper shopping bags to seek alternative sources from other countries, adjust their supply chain strategies, or consider domestic production. If the USITC determination is negative or a finding of negligibility is made, importers of paper shopping bags can continue their operations without additional duties (taxes or tariffs).
This determination can also reinforce the business relationships between foreign suppliers and US importers, as they’d perceive lesser trade risks in the foreseeable future. On July 14th, 2023, the USITC made a preliminary determination to continue the investigation.
On October 31, 2023, the United States Department of Commerce disclosed its initial positive findings in the subsidy investigations concerning specific paper shopping bags originating from China and India. Please see the table below for important dates.
Most recently, on December 28, 2023, the USITC announced affirmative preliminary determinations in the AD investigations of certain paper shopping bags from Cambodia, China, Colombia, India, Malaysia, Portugal, Taiwan, Turkey, and Vietnam. Concurrently, the Department of Commerce is conducting countervailing duty investigations on imports of certain paper shopping bags from China and India. At this time, we know these determinations apply only to bags with handles.
Key Dates for the Petitions of Paper Shopping Bag Imports
The Tariff Act of 1930 introduced Antidumping and Countervailing Duty Laws as mechanisms to counterbalance the effects of unfairly priced or subsidized imports on domestic industries.
Antidumping (AD) and countervailing (CVD) petitions offer a legal pathway for US manufacturers to challenge the price of imported products that are seemingly below the cost of goods, thereby undercutting US manufacturers’ ability to sustain market share.
Through AD and CVD petitions, industries can protect themselves from overseas competitors who employ unjust trade tactics.
Navigate These Regulatory Challenges with CRP’s Expert Guidance
As the regulatory landscape evolves, navigating compliance can be a complex endeavor. CRP’s packaging experts can help you steer through these challenges with ease.
CRP is actively engaged in discussions with industry experts and legal counsel to gather more specific information about the paper bag specifications that will require attention and the individualized duties and tariffs that may apply.
In the coming weeks, we will provide you with more detailed information on how these determinations may impact your business. We understand the importance of clarity during this time of uncertainty and want to assure you that we are working diligently to address any concerns you may have.
Our deep understanding of packaging supply chains and strategic partnerships provides you with solutions to safeguard your company’s paper bag supply chain. Here’s how we do it.
Comprehensive Analysis
First, we assess your company’s current paper bag program and compliance with potential antidumping (AD) and countervailing (CVD) duties regulations.
This assessment will provide a clear understanding of your company’s position in the market and any potential risks you may face.
Strategic Decision-Making
Based on our analysis, the next step involves providing the most economical and efficient program from our robust paper bag manufacturing base from both domestic sources and throughout the world.
This strategic planning provides you with a tailored approach to handle regulatory challenges while ensuring a streamlined supply chain for your paper shopping bags.
Let CRP help you plan for what’s ahead in the paper bag market so you can stay agile to any changes thrown your way.
