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United States International Trade Commission UNITED STATES INTERNATIONAL TRADE COMMISSION In the Matter of: ) Investigation No.: MATTRESSES FROM CHINA ) 731-TA-1424 (FINAL) Pages: 1 - 285 Place: Washington, D.C. Date: Friday, October 11, 2019 Ace-Federal Reporters, Inc. Stenotype Reporters 555 12th Street, NW Suite 630-A Washington, D.C. 20004 202-347-3700 Nationwide Coverage www.acefederal.com 1 1 THE UNITED STATES INTERNATIONAL TRADE COMMISSION 2 In the Matter of: ) Investigation No.: 3 MATTRESSES FROM CHINA ) 731-TA-1424 4 ) (Final) 5 6 7 8 9 Friday, October 11, 2019 10 Main Hearing Room (Room 101) 11 U.S. International 12 Trade Commission 13 500 E Street, S.W. 14 Washington, D.C. 15 The meeting commenced, pursuant to notice, at 16 9:30 a.m., before the Investigative Staff of the United 17 States International Trade Commission, Chairman David S. 18 Johanson, presiding. 19 APPEARANCES: 20 Commissioners Present: 21 Chairman David S. Johanson (presiding) 22 Commissioner Rhonda K. Schmidtlein 23 Commissioner Randolph J. Stayin 24 Commissioner Amy A. Karpel 25 Ace-Federal Reporters, Inc. 202-347-3700 2 1 Staff: 2 WILLIAM R. BISHOP, SUPERVISORY HEARINGS AND INFORMATION 3 OFFICER 4 TYRELL T. BURCH, PROGRAM SUPPORT SPECIALIST 5 SHARON BELLAMY, RECORDS MANAGEMENT SPECIALIST 6 7 CALVIN CHANG, INVESTIGATOR 8 ROBERT CASANOVA, INTERNATIONAL TRADE ANALYST 9 ANDREW KNIPE, INTERNATIONAL ECONOMIST 10 JOANNA LO, ACCOUNTANT/AUDITOR 11 KARL VON SCHRILTZ, ATTORNEY/ADVISOR 12 CRAIG THOMSEN, SUPERVISORY INVESTIGATOR 13 14 15 16 17 18 19 20 21 22 23 24 25 Ace-Federal Reporters, Inc. 202-347-3700 3 1 Opening Remarks: 2 Petitioner (Mary Jane Alves, Cassidy Levy Kent (USA) LLP) 3 Respondents (Eric C. Emerson, Steptoe & Johnson LLP) 4 5 In Support of the Imposition of Antidumping Duty Order: 6 Cassidy Levy Kent (USA) LLP 7 Washington, DC 8 on behalf of 9 Corsicana Mattress Company; Elite Comfort Solutions; Future 10 Foam Inc.; FXI Inc.; Innocor, Inc.; Kolcraft Enterprises 11 Inc.; Leggett & Platt, Incorporated; Serta Simmons Bedding, 12 LLC and Tempur Sealy International, Inc. 13 (collectively "Mattress Petitioners") 14 Richard Anderson, Executive Vice President and 15 President, North America, Tempur Sealy 16 International 17 Joseph M. Kamer, Senior Vice President, General Counsel 18 and Secretary, Tempur Sealy International 19 Dave Swift, Chairman and Chief Executive Officer, 20 Serta Simmons Bedding, LLC 21 Clara DeQuick, Vice President, Associate General 22 Counsel, Serta Simons Bedding, LLC 23 Terry Malone, Senior Vice President - Finance, 24 Serta Simmons Bedding, LLC 25 -- continued -- Ace-Federal Reporters, Inc. 202-347-3700 4 1 In Support of the Imposition of Antidumping Order 2 (continued): 3 Eric Rhea, Vice President, President - Bedding Group, 4 Leggett & Platt, Incorporated 5 Amy DeArmond, Director, Government Affairs, 6 Leggett & Platt, Incorporated 7 Christos Chrisafides, Chief Executive Officer, 8 Elite Comfort Solutions 9 Stuart Fallen, Vice President, Corsicana Bedding, LLC 10 Thomas Koltun, President, Kolcraft Enterprises Inc. 11 Travis Thigpen, Vice President of Sales - Online and 12 Direct to Retail, FXI Inc. 13 Michael Potochar, Procurement Director, Innocor, Inc. 14 Deirdre Maloney, Senior International Trade Advisor, 15 Steptoe & Johnson LLP 16 Yohai Baisburd, Mary Jane Alves, Ulrika K. Swanson - 17 Of Counsel 18 19 INTERESTED PARTY IN SUPPORT: 20 Brooklyn Bedding, Inc. 21 Phoenix, AZ 22 John Merwin, Chief Executive Officer 23 24 25 -- continued -- Ace-Federal Reporters, Inc. 202-347-3700 5 1 In Opposition to the Imposition of Antidumping Duty Order: 2 Wilmer Cutler Pickering Hale and Dorr LLP 3 Washington, DC 4 on behalf of 5 Classic Brands, LLC 6 Patrick J. McLain, Stephanie E. Hartmann - Of Counsel 7 8 Mowry & Grimson, PLLC 9 Washington, DC 10 on behalf of 11 Ashley Furniture Industries, Inc. 12 Brian Adams, Vice President, Procurement, 13 International Sourcing Operations, Regulatory 14 Affairs, Ashley Furniture Industries, Inc. 15 Kristin H. Mowry, James C. Beaty - Of Counsel 16 17 Steptoe & Johnson LLP 18 Washington, DC 19 on behalf of 20 Quanzhou Hen Ang Industrial and Trade Co., Ltd 21 Zhejiang Glory Home Furnishings Co., Ltd. 22 Guangdong Diglant Furniture Industrial Co., Ltd. 23 Ningbo Shuibishen Home Textile Technology Co., Ltd. 24 Jiangsu Wellcare Home Furnishing Products Co., Ltd. 25 Jinlonggheng Furniture Co, Ltd. Ace-Federal Reporters, Inc. 202-347-3700 6 1 Inno-Sports Co., Ltd. 2 Healthcare Co., Ltd. and China Beds Direct 3 Sinomax Macao Commercial Offshore Limited and 4 Sinomax USA, Inc. 5 Better Zs Co., Ltd. 6 (collectively "The Mattress Suppliers Group") 7 Samuel Malouf, Chief Executive Officer, Malouf 8 Jeffrey Steed, Chief Legal Officer, Malouf 9 Kyle Robertson, Product Development Director, Malouf 10 Michael Douglas, Vice President, Sales, Malouf 11 Steven Douglas, Director, Online, Malouf 12 Jordan Haws, Director, Supply Chain, Malouf 13 James P. Dougan, Vice President, Economic Consulting 14 Services 15 Cara Groden, Senior Economist, Economic Consulting 16 Services 17 Eric C. Emerson, Thomas J. Trendl, Henry Cao, 18 Marcia Pulcherio - Of Counsel 19 20 REBUTTAL/CLOSING REMARKS: 21 Petitioner (Yohai Baisburd, Cassidy Levy Kent (USA) LLP) 22 Respondents (Eric C. Emerson, Steptoe & Johnson LLP) 23 24 25 Ace-Federal Reporters, Inc. 202-347-3700 7 1 I N D E X 2 Page 3 Mary Jane Alves, Cassidy Levy Kent (USA) LLP 10 4 Eric C. Emerson, Steptoe & Johnson LLP 14 5 Dave Swift, Chairman and Chief Executive Officer, 6 Serta Simmons Bedding, LLC 19 7 Richard Anderson, Executive Vice President and 8 President, North America, Tempur Sealy 9 International 26 10 Stuart Fallen, Vice President, Corsicana Bedding, LLC 33 11 Christos Chrisafides, Chief Executive Officer, 12 Elite Comfort Solutions 36 13 Thomas Koltun, President, Kolcraft Enterprises Inc. 41 14 Eric Rhea, Vice President, President - Bedding Group, 15 Leggett & Platt, Incorporated 44 16 John Merwin, Chief Executive Officer, 17 Brooklyn Bedding, Inc. 49 18 Eric C. Emerson, Steptoe & Johnson LLP 136 19 Brian Adams, Vice President, Procurement, 20 International Sourcing Operations, Regulatory 21 Affairs, Ashley Furniture Industries, Inc. 142 22 Samuel Malouf, Chief Executive Officer, Malouf 152 23 Kyle Robertson, Product Development Director, Malouf 155 24 James P. Dougan, Vice President, Economic 25 Consulting Services 162 Ace-Federal Reporters, Inc. 202-347-3700 8 1 I N D E X 2 Page 3 Patrick J. McLain, Wilmer Cutler Pickering Hale and Dorr 177 4 Yohai Baisburd, Cassidy Levy Kent (USA) LLP 269 5 Eric C. Emerson, Steptoe & Johnson LLP 277 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ace-Federal Reporters, Inc. 202-347-3700 9 1 P R O C E E D I N G S 2 (9:30 a.m.) 3 MR. BISHOP: Would the room please come to order. 4 CHAIRMAN JOHANSON: Good morning. On behalf of 5 the U.S. International Trade Commission, I welcome you to 6 this hearing in the Final Phase of Investigation No. 7 731-TA-1424 involving Mattresses from China. 8 The purpose of this investigation is to determine 9 whether an industry in the United States is materially 10 injured or threatened with material injury, or the 11 establishment of an industry in the United States is 12 materially retarded by reason of imports of mattresses from 13 China. 14 A schedule setting forth the presentation of this 15 hearing, notices of investigation, and transcript order 16 forms are available at the public distribution table. All 17 prepared testimony should be given to the Secretary. Please 18 do not place testimony directly on the public distribution 19 table. 20 All witnesses must be sworn in by the Secretary 21 before presenting testimony. I understand that parties are 22 aware of the time allocations. Any questions regarding the 23 time allocations should be directed to the Secretary. 24 Speakers are reminded not to refer in their 25 remarks or answers to questions to business proprietary Ace-Federal Reporters, Inc. 202-347-3700 10 1 information. Please speak clearly into the microphones and 2 state your name for the record for the benefit of the court 3 Reporter and for those seated in the back of the room. 4 If you will be submitting documents that contain 5 information you wish classified as business confidential, 6 your request should comply with Commission Rule 201.6. 7 Mr. Secretary, are there any preliminary matters? 8 MR. BISHOP: Mr. Chairman, I would note that all 9 witnesses for today's hearing have been sworn in. There are 10 no other preliminary matters. 11 CHAIRMAN JOHANSON: Alright, then let's commence 12 with opening remarks by Petitioners. 13 MR. BISHOP: Opening remarks on behalf of 14 Petitioners will be given by Mary Jane Alves of Cassidy Levy 15 Kent. Ms. Alves, you have five minutes. 16 OPENING STATEMENT OF MARY JANE ALVES 17 MS. ALVES: Good morning, Mr. Chairman, and 18 Commissioner Schmidtlein, and welcome to Commissioners 19 Stayin and Karpel. 20 I am Mary Jane Alves with Cassidy Levy Kent. 21 Together with the Yohai Baisburd we represent Mattress 22 Petitioners Corsicana, ECS, Future Foam, FXI, Innocor, 23 Kolcraft, Leggett & Platt, Serta Simmons, and Tempur Sealy. 24 We will explain why dumped mattresses from China 25 are causing and threatening material injury to the U.S. Ace-Federal Reporters, Inc. 202-347-3700 11 1 mattress industry. 2 Since 2016, Chinese mattresses have doubled, 3 increasing faster than demand. By pervasively underselling 4 the domestic like product, Chinese imports displaced the 5 domestic industry sales and caused significant price 6 depression and suppression. 7 Despite growing U.S. demand, the domestic 8 industry reduced capacity and produced and shipped fewer 9 mattresses overall. As its market share fell, the domestic 10 industry did not use its full capacity, operated fewer 11 shifts, reduced employment, and faced higher unit labor 12 costs.
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