January 31, 2020
News Release 20-007
Inv. No(s). 731-TA-1465 (Preliminary)
Contact: Peg O'Laughlin, 202-205-1819
USITC Votes to Continue Investigation Concerning 4th Tier Cigarettes from Korea

The United States International Trade Commission (USITC) today determined that there is a reasonable indication that a U.S. industry is threatened with material injury by reason of imports of 4th tier cigarettes from Korea that are allegedly sold in the United States at less than fair value. 

Chairman David S. Johanson and Commissioners Rhonda K. Schmidtlein, Jason E. Kearns, Randolph J. Stayin, and Amy A. Karpel voted in the affirmative. 

As a result of the Commission’s affirmative determination, the U.S. Department of Commerce will continue with its antidumping duty investigation concerning imports of this product from Korea, with its preliminary antidumping duty determination due on or about February 10, 2020.

The Commission’s public report 4th Tier Cigarettes from Korea (Inv. No. 731-TA-1465 (Preliminary), USITC Publication 5016, February 2020) will contain the views of the Commission and information developed during the investigation.

The report will be available after March 3, 2020; when available, it may be accessed on the USITC website at:  https://www.usitc.gov/commission_publications_library.

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, DC 20436

FACTUAL HIGHLIGHTS

4th Tier Cigarettes from Korea
Investigation No. 731-TA-1465 (Preliminary)

Product Description:  Cigarettes are combustible tobacco products rolled in paper and delivering nicotine. They may or may not have a filter and are sold in packs of 20 cigarettes in either 100's (100mm) or King's (85mm) lengths. The packaging and lengths are regulated by the U.S. Food and Drug Administration ("FDA"). While there is no single definition for a fourth tier cigarette, there is a consensus that fourth tier cigarettes are deeply discounted products. Fourth tier cigarettes may contain a higher percentage of tobacco stems, consisting of 10 to 40 percent tobacco stems compared with non-fourth tier cigarettes which typically contain less than 10 percent stems. Additionally, fourth tier cigarettes typically use a single-component filter while non-fourth tier cigarettes may use multi-segmented filters.

Status of Proceedings:

1.   Type of investigation:  Preliminary phase antidumping duty investigation.
2.   Petitioners:  Xcaliber, Pryor, OK; Cheyenne International, Grover, NC.
3.   USITC Institution Date:  Wednesday, December 18, 2019.
4.   USITC Conference Date:  Wednesday, January 8, 2020.
5.   USITC Vote Date:  Friday, January 31, 2020.
6.   USITC Notification to Commerce Date:  Monday, February 3, 2020.

U.S. Industry in 2018:

1.   Number of U.S. producers:  4.
2.   Location of producers’ plants:  Florida, New York, North Carolina, and Oklahoma.
3.   Production and related workers:  [1]
4.   U.S. producers’ U.S. shipments:  1
5.   Apparent U.S. consumption:  1
6.   Ratio of subject imports to apparent U.S. consumption:  1

U.S. Imports in 2018:

1.   Subject imports:  1
2.   Nonsubject imports:  1
3.   Leading import sources:  Canada, Korea.

 

[1] Withheld to avoid disclosure of business proprietary information.

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