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Law360 (June 1, 2021, 3:03 PM EDT) -- A lawnmower company is suing the federal government over retroactive antidumping and countervailing duties imposed on its engines imported from China, denying that it had surged shipments to avoid the levies while the U.S. was investigating the imports.
MTD Products Inc.'s Friday complaint tells the U.S. Court of International Trade that the "distorting" effects of the COVID-19 pandemic were to blame for its unusual importing activity that occurred after a domestic manufacturer asked the U.S. Department of Commerce and the International Trade Commission to look into whether Chinese lawnmower engines and other components were being dumped in the U.S. or illegally subsidized by Beijing.
Chinese manufacturers had been forced to idle in the early days of the pandemic to control the spread of COVID-19, and later importing increases were due to production restarting, MTD Products says.
"Further, COVID-19-related closures in the United States, in addition to commercial uncertainties regarding petitioner's long-term viability and inability to meet a spike in domestic demand, artificially inflated import volumes over this period," MTD Products says.
Commerce had concluded that unfair importing practices were at play, and the ITC ordered MTD Products to pay retroactive duties on shipments that had entered 90 days before Commerce ruled in favor of the duties. "Critical circumstances" undermined tariffs of up to 535.5% that Chinese lawnmower engines face, the ITC said.
But MTD Products says it was unlikely that its importing activities negated the duty orders' intended effects. It had already used up most of its import inventory and had purchased "significantly more" domestically produced engines in the last quarter of 2020 than in the same period in 2019, it says.
"It is not evident, therefore, that the artificially inflated level of subject imports entered after the filing of the petition have supplanted sales for the domestic industry," MTD Products says.
One ITC commissioner voted against retroactively imposing the duties, according to the commission's order.
The importer asked the trade court to order the ITC to review the retroactive duty imposition.
MTD Products didn't immediately respond to Tuesday requests for comment. The ITC declined to comment, citing pending litigation.
MTD Products is represented by Alexander Schaefer of Crowell & Moring LLP.
Counsel information for the government was not immediately available.
The case is MTD Products Inc. v. U.S., case number 1:21-cv-00264, in the U.S. Court of International Trade.
--Editing by Brian Baresch.
Update: This story has been updated with the ITC's response to requests for comment.
For a reprint of this article, please contact reprints@law360.com.
