U.S. Industry Weighs In Opposed to Rayon Tariff

Agathon Associates, on behalf of ICF Mercantile, and 24 other individuals or entities have filed comments with the Office of the U.S. Trade Representative objecting to the proposed inclusion of rayon staple fiber on the list of products from the European Union potentially subject to 100% import duty in retaliation for the EU's unfair treatment of US beef

Here are the comments submitted by Agathon Associates--

1. Viscose rayon staple fiber is not available from domestic U.S. sources.

It is generally known in the textile industry that there is no U.S. production of viscose rayon, a fact that has been acknowledged by the U.S. government. Following the receipt of a request on April 17, 2007, from the United States Trade Representative, the U.S. International Trade Committee instituted investigation No. NAFTA-103-018 Certain Textile Articles: Probable Effect of Modification of NAFTA Rules of Origin for Goods of Canada and Mexico (Sanitary Articles and Nonwoven Wipes). The investigation found "There is no known U.S. production of either viscose rayon staple fibers or acrylic staple fibers" and "In September 2005, Liberty Fibers Corp., Lowland, TN, the sole North American producer of the subject rayon fibers, ceased all manufacturing operations…" Subsequently the U.S. government has determined that the rules of origin and short supply lists under or various free trade agreements should reflect the absence of domestic production of viscose rayon.

2. Other fibers cannot be substituted for viscose rayon.

Other fibers do not have the performance characteristics of rayon, which is why the U.S. Department of Defense requires rayon for certain applications and exempts certain rayon from the "Berry Amendment" domestic sourcing requirement.

3. Additional duties on rayon fiber is contrary to the economic interest of the U.S.

Additional duties on a product that can be sourced only from non-domestic sources is counter to U.S. policy intended to encourage domestic manufacturing. Since 1982, nearly every Congress has passed legislation, the Miscellaneous Tariff Bill, to temporarily suspend tariffs on certain imported products not available from domestic sources. Among the articles historically included in the MTB was rayon fiber. Since the last MTBs expired at the end of 2012, these U.S. manufacturers have been forced to pay duty on fiber that had been duty-free for several years. That 2013 snap-back to the general rate of duty harmed these manufacturers. Further increased duty imposed, due to unrelated trade in an agricultural product, will be a heavy burden on already burdened manufacturers. In 2016 Eleven U.S. manufacturers companies, including ICF Mercantile, filed petitions with the U.S. International Trade Commission for the suspension of the collection of duty on rayon fiber provided for in subheading 5504.10.00 under the new Miscellaneous Tariff Bill procedures of the American Manufacturing Competitiveness Act of 2016. These company are looking forward with sound reason to believe that the general rate of duty will be suspended. It would be highly inconsistent to grant manufacturers relief from a 4.3% import duty, only to impose an even larger duty as retaliation for the EU’s beef regime.

4. Additional duties on rayon fiber is contrary to the national security interests of the U.S.

Sec. 829 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181), enacted on January 28, 2008, provided a waiver for DoD to procure fire resistant rayon fiber for the production of uniforms whereby such fire resistant rayon fiber can be procured from foreign sources. In the case of the fire resistant rayon fiber that ICF Mercantile imports for DoD, the fiber is of European origin. Additional duties would adversely affect our military and tax payers.

Comments were also submitted by:

• Bob Allen (No Company Listed),
• Edwin Betz (No Company Listed),
• Liz Braund, Royal Robbins,
• Frank DeGuire, Meridian Industries, Inc.,
• Katherine Dutilh, Milliken,
• Sean Fahimian (No Company Listed),
• Scott Farmer, Berry Plastics Corporation,
• Darryl Fournier, Mogul South Carolina,
• Jessica Franken, INDA,
• Dmitry Konstantinovsky, Texollini,
• Jason Lough, Sontara Old Hickory Inc.,
• Susan J Mocarski, SJM Merchant Services, LLC,
• Sean Mulvaney, The Procter & Gamble Company (P&G),
• Daniel Nation, Parkdale, Inc.,
• Paul O'Day, AFMA,
• John Patterson, Lenzing Fibers Inc.,
• Richard Reid (No Company Listed),
• Randy Rudolph, Rockline Industries,
• Elizabeth Ruiz , Lenzing,
• Jeff Sellers, Jacob Holm Industries (America),
• Norman Sylvia, Suominen,
• Augustine Tantillo, NCTO,
• Daniel Tuttle (No Company Listed), and
• Amy Wolfteich (No Company Listed).

To read all the comments, go to www.regulations.gov, search for "USTR-2016-0025," then open the docket, view all comments, and search for "rayon."