China Manufacturers Association, North American marketers of Double Coin and Warrior brand tires, said it is shocked and surprised by a “preliminary anti-dumping determination” issued by the U.S. Department of Commerce over the company’s OTR tires imported into the U.S.
CMA said the DOC started its anti-dumping review in October 2013 “to determine whether the anti-dumping rate assigned to Double Coin and CMA should be changed.”
But, CMA explained, “After the year long process, Commerce Department rendered its preliminary determination last week and determined that company’s sale prices were well above market economy costs of production; indeed using the company’s own sales and cost data, the Commerce Department calculated an effectively determined a 0% (0.69%) new anti-dumping rate.
“However, in a move based on policy change that is described by the Commerce Department as a “still evolving” policy, the Commerce Department decided that it would ignore the actual data and impose a 105 percent anti-dumping rate on CMA’s imports of OTR tires due to the Commerce Department’s perception that a Chinese shareholder of Double Coin had influence in the manner in which CMA determined its U.S. selling prices,” CMA said in a press release. “The company is currently preparing an extensive counter in order to obtain a reversal when the Commerce Department renders its final determination.”
You can read the DOC determination as published in the Federal Register here.
“The Commerce Department’s justification for ignoring actual sales and cost data from CMA and Double Coin is questionable in our case,” said Dan Porter of Curtis, Mallett-Prevost, Colt & Mosle LLP, lead counsel for CMA. “Even though the Commerce Department explicitly found that CMA’s sale prices were well above market economy costs of production – and therefore had no dumping – their preliminary determination is to still impose an arbitrary anti-dumping duty of 105%.
“The Commerce Department made this decision entirely because CMA’s largest shareholder – Double Coin – is a publically traded company in China whose largest stockholder – Huayi – is a state-owned company,” Porter continued. “The Commerce Department assumed that this state-owned company influenced CMA’s U.S. sales of Double Coin tires.”
Porter said that according to the Commerce Department, such conclusions represent a new “still evolving” change in policy about how to treat state-owned Chinese companies in anti-dumping cases. Because of this new policy, instead of recognizing the zero anti-duty margin calculated for CMA tires, the Commerce Department is considering a duty of 105% based on the rate imposed on other companies.
“Fortunately, this is only a preliminary determination, and we have the chance to make arguments to counter this decision and have the dumping margin correctly calculated for CMA,” said Porter. “We will explain that the voluminous information presented to the Commerce Department in fact demonstrates that the Chinese state-owned shareholder does not have any actual influence on CMA’s day-to-day pricing decisions. CMA is an American brand and company operating in the U.S., and they have been found to be conducting business properly. Needless to say, CMA is quite surprised by this initial ruling, which appears to be based on a misunderstanding of the evidence before the Commerce Department.”
