DOC investigates as amorphous silica fiber producer points to illegal trading practices.
The next chapter in US-China economic relations is upon us.
For those not in the know, China has been making moves to revolutionize its manufacturing industry, and in that process has been accused of artificially devaluing its own currency to drop prices of its exports, like stainless steel.
On June 28, 2016, the U.S. Department of Commerce (DOC) made a preliminary determination that Chinese manufacturers have been illegally subsidizing certain amorphous silica fibers (ASF) used to insulate and resist extreme heat in industrial applications.
The subsidization of ASF allows Chinese producers to sell the material at unfairly low prices in the US market, undercutting locally-made products.
Possible Chinese Product Dumping Harming Quality of Products Sold to US Defense Contractors
The DOC is combating China’s manipulative habit by imposing provisional duties ranging from 4.3 percent to 104.1 percent, depending on the exporter, as it instigates countervailing duty (CVD) and anti-dumping (AD) investigations.
The latest rounds of investigation were launched in response to petitions from Auburn Manufacturing, Inc. (AMI). The company sought countervailing duties to remedy the damaging effects of the Chinese government’s alleged subsidization of its ASF producers and anti-dumping duties to combat low pricing from Chinese exporters.
Kathie Leonard, President and CEO of Auburn Manufacturing, Inc.
“This is just the beginning,” said Kathie Leonard, president/CEO of AMI.
“Although these initial CVD margins show that Chinese exporters are receiving subsidies, we believe the final determination will yield even higher subsidy rates. China must be held accountable. It is using unfair trade practices to tilt the playing field against American workers and businesses.”
As an American producer of industrial grade ASF, AMI is the principal supplier of the product to the US Navy and US defense contractors.
AMI believes that certain US distributors are selling Chinese-made ASF to US defense contractors, which is then used in the construction, repair and maintenance of Navy ships – violating the Berry Amendment and Buy American requirements.
“Product dumping that leads to tragedy is not a new concept,” Leonard said. “We’ve seen the consequences of Chinese tires, pet food and toothpaste. At best, the quality of ASF from China is inconsistent and buying from a US supplier does not ensure it’s a US product.”
DOC Continues Investigation on Possible Chinese Countervailing Duties and Dumping
Preliminary findings of the AD investigation have yet to be announced.
“When the DOC announces its anti-dumping determination, we expect it will result in further significant duties on Chinese ASF,” said Leonard.
Final determinations of the DOC’s investigations are scheduled for early November 2016.
For both AD and CVD duties to be imposed, the US government must determine not only that dumping and/or subsidization is occurring, but also that there is “material injury or threat thereof” by reason of the dumped and/or subsidized imports.
The final determination will be made in January 2017.
Will these duties be enough to curb Chinese product dumping? Leave your thoughts in the comments below.
