[Federal Register Volume 85, Number 177 (Friday, September 11, 2020)]
[Notices]
[Pages 56216-56219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20073]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-128]


Mattresses From the People's Republic of China: Preliminary 
Affirmative Countervailing Duty Determination, and Alignment of Final 
Determination With Final Antidumping Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that countervailable subsidies are being provided to producers and 
exporters of mattresses from the People's Republic of China. The period 
of investigation is January 1, 2019 through December 31, 2019. 
Interested parties are invited to comment on this preliminary 
determination.

DATES: Applicable September 11, 2020.

FOR FURTHER INFORMATION CONTACT: Theodore Pearson or Mary Kolberg, AD/
CVD Operations, Office I, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-2631 or (202) 
482-1785, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    This preliminary determination is made in accordance with section 
703(b) of the Tariff Act of 1930, as amended (the Act). Commerce 
published the notice of initiation of this investigation on April 24, 
2020.\1\ On June 10, 2020, Commerce postponed the preliminary 
determination of this investigation to August 28, 2020. For a complete 
description of the events that followed the initiation of this 
investigation, see the Preliminary Decision Memorandum.\2\ A list of 
topics discussed in the Preliminary Decision Memorandum is included as 
Appendix II to this notice. The Preliminary Decision Memorandum is a 
public document and is on file electronically via Enforcement and 
Compliance's Antidumping and Countervailing Duty Centralized Electronic 
Service System (ACCESS). ACCESS is available to registered users at 
http://access.trade.gov. The signed and electronic versions of the 
Preliminary Decision Memorandum are identical in content.
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    \1\ See Mattresses from the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 85 FR 22998 (April 
24, 2020) (Initiation Notice).
    \2\ See Memorandum, ``Decision Memorandum for the Preliminary 
Determination of the Countervailing Duty Investigation of Mattresses 
from the People's Republic of China,'' dated concurrently with, and 
hereby adopted by, this notice (Preliminary Decision Memorandum).
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Scope of the Investigation

    The products covered by this investigation are mattresses from the 
People's Republic of China. For a complete description of the scope of 
this investigation, see Appendix I.

[[Page 56217]]

Scope Comments

    In accordance with the preamble to Commerce's regulations,\3\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (i.e., scope).\4\ Certain interested 
parties commented on the scope of the investigation as it appeared in 
the Initiation Notice.\5\ Commerce intends to issue its preliminary 
decision regarding comments concerning the scope of the antidumping 
duty (AD) and CVD investigations in the preliminary determinations of 
the concurrent AD investigations.
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    \3\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997).
    \4\ See Initiation Notice.
    \5\ See Cozy Comfort LLC's Letter, ``Mattresses from Cambodia, 
Indonesia, Malaysia, the People's Republic of China, Serbia, 
Thailand, the Republic of Turkey, and the Socialist Republic of 
Vietnam; Comments on the Scope of the Less-Than-Fair-Value and 
Countervailing Duty Investigations,'' dated May 26, 2020; see also 
Night & Day Furniture LLC's Letter, ``Mattresses from Cambodia, 
China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam,'' 
dated May 26, 2020; Target General Merchandise, Inc.'s Letter, 
``Mattresses from Cambodia, Indonesia, Malaysia, Serbia, Thailand, 
the Republic of Turkey, the Socialist Republic of Vietnam and the 
People's Republic of China: Scope Comments,'' dated May 26, 2020; 
Brooklyn Bedding's, Corsicana Mattress Company's Elite Comfort 
Solutions', FXI, Inc.'s, Innocor, Inc.'s, Kolcraft Enterprises, 
Inc.'s, Leggett & Platt, Incorporated's, the International 
Brotherhood of Teamsters', and United Steel, Paper, and Forestry, 
Rubber, Manufacturing, Energy, Allied Industrial and Service Workers 
International Union's, AFL-CIO's (USW) (collectively, the 
petitioners) Letter, ``Mattresses from Cambodia, China, Indonesia, 
Malaysia, Serbia, Thailand, Turkey, and Vietnam: Mattress 
Petitioner's Scope Rebuttal Comments,'' dated June 5, 2020; and Cozy 
Comfort LLC's Letter, ``Mattresses from Cambodia, Indonesia, 
Malaysia, the People's Republic of China, Serbia, Thailand, the 
Republic of Turkey, and the Socialist Republic of Vietnam: Rebuttal 
Comments on the Scope of the Less-Than-Fair Value and Countervailing 
Duty Investigation,'' dated June 5, 2020.
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Methodology

    Commerce is conducting this investigation in accordance with 
section 701 of the Act. For each of the subsidy programs found 
countervailable, Commerce preliminarily determines that there is a 
subsidy, i.e., a financial contribution by an ``authority'' that gives 
rise to a benefit to the recipient, and that the subsidy is 
specific.\6\
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    \6\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    Commerce notes that, in making these findings, it relied on facts 
available and, because it finds that necessary information was missing 
from the record and because respondents did not act to the best of 
their ability to respond to Commerce's request for information, it drew 
adverse inferences in selecting from among the facts otherwise 
available. For further information, see ``Use of Facts Otherwise 
Available and Adverse Inferences'' in the Preliminary Decision 
Memorandum.

Alignment

    In accordance with section 705(a)(1) of the Act and 19 CFR 
351.210(b)(4), and based on the petitioner's request, we are aligning 
the final CVD determination in this investigation with the final 
determinations in the concurrent AD investigations of mattresses from 
Cambodia, Indonesia, Malaysia, Serbia, Thailand, the Republic of 
Turkey, and the Socialist Republic of Vietnam.\7\ Consequently, the 
final CVD determination will be issued on the same date as the final AD 
determinations, which are currently scheduled to be issued no later 
than January 11, 2021, unless postponed.
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    \7\ These AD investigations were initiated at the same time as 
this CVD investigation. In addition, the AD investigations and this 
CVD investigation cover the same class or kind of merchandises. See 
Initiation Notice; see also Mattresses from Cambodia, Indonesia, 
Malaysia, Serbia, Thailand, the Republic of Turkey, and the 
Socialist Republic of Vietnam: Initiation of Less-Than-Fair-Value 
Investigations, 85 FR 23002 (April 24, 2020).
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All-Others Rate

    Sections 703(d) and 705(c)(5)(A) of the Act provide that in the 
preliminary determination, Commerce shall determine an estimated all-
others rate for companies not individually examined. This rate shall be 
an amount equal to the weighted average of the estimated subsidy rates 
established for those companies individually examined, excluding any 
zero and de minimis rates and any rates based entirely under section 
776 of the Act.
    Pursuant to section 705(c)(5)(A)(ii) of the Act, if the individual 
estimated countervailable subsidy rates established for all exporters 
and producers individually examined are zero, de minimis, or determined 
based entirely on facts otherwise available, Commerce may use any 
reasonable method to establish the estimated subsidy rate for all other 
producers or exporters. In this investigation, all rates are based 
entirely on facts available, pursuant to section 776 of the Act. 
Accordingly, we find under ``any reasonable method'' to rely on a 
simple average of the total AFA rates computed for the non-responsive 
companies as the all-others rate in this preliminary determination. For 
a full description of the methodology underlying Commerce's analysis, 
see the Preliminary Decision Memorandum.

Preliminary Determination

    Commerce preliminarily determines that the following estimated 
countervailable subsidy rates exist:

------------------------------------------------------------------------
                                                           Estimated
                                                        countervailable
                       Company                            subsidy rate
                                                           (percent)
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Kewei Furniture Co Ltd...............................              97.78
Zinus Xiamen.........................................              97.78
Ningbo Megafeat Bedding Co., Ltd./Megafeat Bedding Co              97.78
 Ltd.................................................
Healthcare Co. Ltd...................................              97.78
All Others...........................................              97.78
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Suspension of Liquidation

    In accordance with section 703(d)(1)(B) and (d)(2) of the Act, 
Commerce will direct U.S. Customs and Border Protection (CBP) to 
suspend liquidation of entries of subject merchandise as described in 
the scope of the investigation section entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. Further, pursuant to 19 CFR 351.205(d), 
Commerce will instruct CBP to require a cash deposit equal to the rates 
indicated above.

Disclosure

    Normally, Commerce discloses its calculations performed in 
connection with the preliminary determination to interested parties 
within five days of its public announcement, or if there is no public 
announcement, within five days of the date of publication of this 
notice

[[Page 56218]]

in accordance with 19 CFR 351.224(b). However, because Commerce 
preliminarily applied total AFA rates in the calculation of the benefit 
for the non-responsive companies, and the applied AFA rates are based 
on rates calculated in prior proceedings, there are no calculations to 
disclose.

Verification

    Because the examined respondents in this investigation did not 
provide information requested by Commerce and Commerce preliminarily 
determines each of the examined respondents to have been uncooperative, 
it will not conduct verification.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Enforcement and Compliance no later than 50 
days after the date of publication of the preliminary determination. 
Rebuttal briefs, limited to issues raised in case briefs, may be 
submitted no later than five days after the deadline date for case 
briefs.\8\ Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who 
submit case briefs or rebuttal briefs in this investigation are 
encouraged to submit with each argument: (1) A statement of the issue; 
(2) a brief summary of the argument; and (3) a table of authorities.
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    \8\ See 19 CFR 351.309; see also 19 CFR 351.303 (for general 
filing requirements).
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    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, limited to issues raised in the case and rebuttal 
briefs, must submit a written request to the Assistant Secretary for 
Enforcement and Compliance, U.S. Department of Commerce within 30 days 
after the date of publication of this notice. Requests should contain 
the party's name, address, and telephone number, the number of 
participants, whether any participant is a foreign national, and a list 
of the issues to be discussed. If a request for a hearing is made, 
Commerce intends to hold the hearing at a time and date to be 
determined. Parties should confirm by telephone the date, and time of 
the hearing two days before the scheduled date.

International Trade Commission Notification

    In accordance with section 703(f) of the Act, Commerce will notify 
the International Trade Commission (ITC) of its determination. If the 
final determination is affirmative, the ITC will make its determination 
before the later of 120 days after the date of this preliminary 
determination or 45 days after the final determination.

Notification to Interested Parties

    This determination is issued and published pursuant to sections 
703(f) and 777(i) of the Act and 19 CFR 351.205(c).

    Dated: August 28, 2020.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.

Appendix I--Scope of the Investigation

    The products covered by this investigation are all types of 
youth and adult mattresses. The term ``mattress'' denotes an 
assembly of materials that at a minimum includes a ``core,'' which 
provides the main support system of the mattress, and may consist of 
innersprings, foam, other resilient filling, or a combination of 
these materials. Mattresses may also contain (1) ``upholstery,'' the 
material between the core and the top panel of the ticking on a 
single-sided mattress, or between the core and the top and bottom 
panel of the ticking on a double-sided mattress; and/or (2) 
``ticking,'' the outermost layer of fabric or other material (e.g., 
vinyl) that encloses the core and any upholstery, also known as a 
cover.
    The scope of this investigation is restricted to only ``adult 
mattresses'' and ``youth mattresses.'' ``Adult mattresses'' are 
frequently described as ``twin,'' ``extra-long twin,'' ``full,'' 
``queen,'' ``king,'' or ``California king'' mattresses. ``Youth 
mattresses'' are typically described as ``crib,'' ``toddler,'' or 
``youth'' mattresses. All adult and youth mattresses are included 
regardless of size or size description.
    The scope encompasses all types of ``innerspring mattresses,'' 
``non-innerspring mattresses,'' and ``hybrid mattresses.'' 
``Innerspring mattresses'' contain innersprings, a series of metal 
springs joined together in sizes that correspond to the dimensions 
of mattresses. Mattresses that contain innersprings are referred to 
as ``innerspring mattresses'' or ``hybrid mattresses.'' ``Hybrid 
mattresses'' contain two or more support systems as the core, such 
as layers of both memory foam and innerspring units.
    ``Non-innerspring mattresses'' are those that do not contain any 
innerspring units. They are generally produced from foams (e.g., 
polyurethane, memory (viscoelastic), latex foam, gel-infused 
viscoelastic (gel foam), thermobonded polyester, polyethylene) or 
other resilient filling.
    Mattresses covered by the scope of this investigation may be 
imported independently, as part of furniture or furniture mechanisms 
(e.g., convertible sofa bed mattresses, sofa bed mattresses imported 
with sofa bed mechanisms, corner group mattresses, day-bed 
mattresses, roll-away bed mattresses, high risers, trundle bed 
mattresses, crib mattresses), or as part of a set in combination 
with a ``mattress foundation.'' ``Mattress foundations'' are any 
base or support for a mattress. Mattress foundations are commonly 
referred to as ``foundations,'' ``boxsprings,'' ``platforms,'' and/
or ``bases.'' Bases can be static, foldable, or adjustable. Only the 
mattress is covered by the scope if imported as part of furniture, 
with furniture mechanisms, or as part of a set, in combination with 
a mattress foundation.
    Excluded from the scope of this investigation are ``futon'' 
mattresses. A ``futon'' is a bi-fold frame made of wood, metal, or 
plastic material, or any combination thereof, that functions as both 
seating furniture (such as a couch, love seat, or sofa) and a bed. A 
``futon mattress'' is a tufted mattress, where the top covering is 
secured to the bottom with thread that goes completely through the 
mattress from the top through to the bottom, and it does not contain 
innersprings or foam. A futon mattress is both the bed and seating 
surface for the futon.
    Also excluded from the scope are airbeds (including inflatable 
mattresses) and waterbeds, which consist of air--or liquid-filled 
bladders as the core or main support system of the mattress.
    Also excluded is certain multifunctional furniture that is 
convertible from seating to sleeping, regardless of filler material 
or components, where that filler material or components are 
upholstered, integrated into the design and construction of, and 
inseparable from, the furniture framing, and the outermost layer of 
the multifunctional furniture converts into the sleeping surface. 
Such furniture may, and without limitation, be commonly referred to 
as ``convertible sofas,'' ``sofa beds,'' ``sofa chaise sleepers,'' 
``futons,'' ``ottoman sleepers'' or a like description.
    Also excluded from the scope of this investigation are any 
products covered by the existing antidumping duty orders on 
uncovered innerspring units from China or Vietnam. See Uncovered 
Innerspring Units from the People's Republic of China: Notice of 
Antidumping Duty Order, 74 FR 7661 (Feb. 19, 2009); Uncovered 
Innerspring Units From the Socialist Republic of Vietnam, 73 FR 
75391 (Dec. 11, 2008).
    Also excluded from the scope of this investigation are bassinet 
pads with a nominal length of less than 39 inches, a nominal width 
less than 25 inches, and a nominal depth of less than 2 inches.
    Additionally, also excluded from the scope of this investigation 
are ``mattress toppers.'' A ``mattress topper'' is a removable 
bedding accessory that supplements a mattress by providing an 
additional layer that is placed on top of a mattress. Excluded 
mattress toppers have a nominal height of four inches or less.
    The products subject to this investigation are currently 
properly classifiable under Harmonized Tariff Schedule of the United 
States (HTSUS) subheadings: 9404.21.0010, 9404.21.0013, 
9404.29.1005, 9404.29.1013, 9404.29.9085, and 9404.29.9087. Products 
subject to this investigation may also enter under HTSUS 
subheadings: 9404.21.0095, 9404.29.1095, 9404.29.9095, 9401.40.0000, 
and 9401.90.5081. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise subject to this investigation is dispositive.

[[Page 56219]]

Appendix II--List of Topics Discussed in the Preliminary Decision 
Memorandum

I. Summary
II. Background
III. Scope Comments
IV. Scope of the Investigation
V. Use of Facts Available and Adverse Inferences
VI. Analysis of Programs
VII. Calculation of the All-Others Rate
VIII. Recommendation

[FR Doc. 2020-20073 Filed 9-10-20; 8:45 am]
BILLING CODE P