COUNTRY'S NEWS

U.S. Issues Preliminary Determination in Countervailing Duty Investigation on Molded Fiber Products from Vietnam

Posted on by content02.vinahugo
08
Oct

Recently, the Trade Remedies Authority of Vietnam (TRAV) – Ministry of Industry and Trade – received information that the U.S. Department of Commerce (DOC) had issued its preliminary determination in the countervailing duty (CVD) investigation on molded fiber products imported from Vietnam.

1. Case Overview

  • Product under investigation: Molded fiber products, classified under HS codes 4823.70.0020 and 4823.70.0040, and some related codes such as 4823.61.20, 4823.61.40, 4823.69.20, 4823.69.40.
    (HS 4823 covers paper, paperboard, cellulose wadding, and webs of cellulose fibers, cut to size or shape, and other articles of pulp, paper, or paperboard).

  • Petitioners: Genera, Tellus Products, LLC, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW).

  • Export value from Vietnam (2023): Approximately USD 23 million, according to the U.S. International Trade Commission (USITC).

  • Period of Investigation (POI): Calendar year 2023.

2. Case Progress

On October 28, 2024, the DOC initiated the investigation.
Following initiation, the DOC issued Quantity and Value (Q&V) questionnaires to eight Vietnamese companiesnamed in the petition to collect information for mandatory respondent selection.

Of these, six companies confirmed receipt, and three submitted timely responses. One additional company not listed in the petition and one listed company (but not directly served) also submitted responses.
Three companies that failed to respond were deemed non-cooperative respondents.

Based on submitted Q&V data, the DOC selected one mandatory respondent. The result for this company will serve as the basis for determining CVD rates for all other Vietnamese exporters.

The DOC investigated 26 alleged subsidy programs across six categories:

  1. Corporate income tax incentives

  2. Other tax incentive programs

  3. Land-use incentive programs

  4. Preferential loan programs

  5. Grant programs

  6. Provision of utilities at preferential rates

To date, the DOC has issued one initial and two supplemental questionnaires to both the Government of Vietnam (GOV) and the mandatory respondent.
TRAV has submitted timely responses with coordination from relevant central and local authorities.

3. Preliminary Findings

3.1 Preliminary CVD Rates

According to the DOC’s preliminary determination:

  • 18 of 26 programs were found to confer countervailable subsidies under five main categories (tax, land, loans, grants, utilities).

  • 7 programs were terminated from the investigation, including import duty exemptions and several preferential utility programs (electricity, gas, water, wastewater, telecom).

  • 1 program on accelerated depreciation remains under review.

Preliminary CVD rates:

  • Mandatory respondent: 3.39%

  • Three non-cooperative companies: 173.51% (based on adverse facts available – assuming receipt of all alleged subsidies)

  • All other companies: 3.39% (same as the mandatory respondent)

Notably, Vietnam’s preliminary CVD rate (except non-cooperative firms) is lower than China’s 6.38%, offering a competitive advantage for Vietnamese exporters.

3.2 Retroactive Duties Due to Import Surge

The DOC identified a critical circumstances situation due to a surge in imports after the case initiation.
Comparing import volumes between July–September 2024 and October–December 2024, DOC found an increase of at least 15%, leading to retroactive duty application for 90 days before the preliminary determination date.

4. Assessment

Vietnam’s exports of molded fiber products to the U.S. (USD 23 million in 2023) remain modest compared to China’s (USD 318 million).
However, the lower preliminary duty offers a temporary advantage for Vietnam in this market.

Still, petitioners continue submitting new cross-border subsidy allegations, potentially increasing the burden of proof for both the Government and Vietnamese exporters.
While the preliminary outcome is relatively positive, DOC may amend findings or initiate additional subsidy investigations before issuing its final determination.

5. Next Steps and Recommendations

Following the preliminary determination, DOC may:

  • Issue additional questionnaires or investigate new subsidy allegations;

  • Conduct on-site verifications of Vietnamese companies and government agencies;

  • Allow parties to submit case briefs (within 7 days) and rebuttal briefs (within 5 days) after verification reports;

  • Hold a hearing within 30 days upon request;

  • Issue the final determination (tentatively July 21, 2025, extendable).

Recommendations for Vietnamese Exporters

  • Closely monitor case developments and fully cooperate with DOC;

  • Coordinate actively with TRAV throughout subsequent investigation stages, particularly during supplemental questionnaires or on-site verification.

Contact for Assistance:
Trade Remedies Authority of Vietnam (TRAV) – Ministry of Industry and Trade
23 Ngo Quyen, Hoan Kiem, Hanoi
Emails: thona@moit.gov.vn, ngocny@moit.gov.vn