Antitrust Lawyer Blog
On March 31, 2020, a group of U.S. Mattress producers filed an antidumping (“AD”) and countervailing duty (“CVD”) petition against mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, and Vietnam. During the preliminary investigation, the International Trade Commission (the “Commission”) is tasked with evaluating the competitive effects of the imports to determine whether the imports cause material injury to the domestic market. Upon its finding, the Commission may make a preliminary decision to impose duties until it makes a final determination.
The Department of Justice (“DOJ”) filed a Statement of Interest in the matter requesting that the Commission take into account the effects of COVID-19 on the domestic market and whether the imposition of duties on mattress imports are in the best interests of U.S. consumers. In particular, the DOJ cited to the increase in demand for mattresses in light of the COVID-19 pandemic, and that such demand “will continue to increase significantly during the pandemic as communities around the country expand hospital capacity.”
Given the backdrop of the global pandemic, and the fact that “demand may outpace domestic supply”, DOJ wants to ensure that the imposition of dumping margins, ranging from 48% to more than 1000%, do not increase mattress prices nor affect the supply of mattresses needed around the country.
The mere fear of additional duties could deter American companies from importing sorely needed mattresses to address supply shortages. First, preliminary duties—though they can be refunded if a final determination lowers the duty rates—can lead to price increases and supply disruption in the short term. Second, the risk that duties may be imposed retroactively can deter American companies from importing mattresses to fill supply shortages.
The DOJ letter echoes our firm’s position about this poorly-timed petition. U.S. importers and foreign producers are worried about the effects of duties on the American response to COVID-19, particularly with the ability of hospitals to source mattresses in response to an influx of new patients.