June 04, 2014

United Steelworkers File Petition to Impose Substantial Duties on Imports from China of Tires for Passenger Vehicles and Light Trucks

By Douglas J. Heffner and Richard P. Ferrin

For your information, on June 3, 2014, a petition was filed asking the U.S. government to investigate whether Chinese imports of certain passenger vehicle and light truck (PVLT) tires are being unfairly dumped and subsidized. The U.S. antidumping (AD) law imposes special tariffs to counteract imports that are sold in the United States at less than “normal value.” The U.S. countervailing duty (CVD) law imposes a different set of special tariffs to counteract imports that benefit from unfair foreign government subsidies. For AD and/or CVD duties to be imposed, the U.S. government must determine not only that dumping and/or subsidization is occurring, but also that there is harm to the U.S. industry by reason of the dumped and/or subsidized imports.

The petition was brought by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (USW). In most cases, the petitions are filed by the primary U.S. producers of the product in question, but under certain circumstances U.S. law does allow unions that are representative of the U.S. industry the right to file AD/CVD petitions on behalf of the industry.

The USW alleges that Chinese PVLT tires are being dumped at margins of between approximately 32 and 92 percent, depending on the type of tire and the method for calculating the Chinese price. If the U.S. government confirms these figures, U.S. Customs and Border Protection would impose a special antidumping duty on all Chinese imports of this product, up to approximately 92 percent. Additional duties to counteract unfair subsidization are not quantified in the petition, but the USW alleges that they are substantial. Under U.S. law, importers of the PVLT tires are liable for additional AD and CVD duties. In addition, if significant AD and CVD duties are imposed, it could severely disrupt the supply of PVLT tires into the United States.

These allegations will be investigated by two U.S. government agencies, the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC). The ITC must make a preliminary determination on the harm issue no later than July 18, 2014. The DOC must make a preliminary CVD determination by August 28, 2014, and a preliminary AD determination by October 31, 2014, although both DOC deadlines could be postponed. Importers could be liable for potential AD and CVD duties beginning the date that the preliminary determinations are published in the Federal Register. The entire investigation process takes approximately one year to complete. If the DOC imposes AD and CVD duty orders, final duties are determined approximately two years later.

If you are an importer or purchaser of tires from China, you can fight the imposition of these additional duties. If you are interested in fighting these potential duties, please contact us.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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