WASHINGTON (Aug. 10, 2010)—The U.S. Court of International Trade has ordered the Commerce Department to stop imposing countervailing duties on certain OTR tires imported from China, calling into question the validity of duties imposed on the products since mid-2007.
The CIT determined in an Aug. 4 ruling that the Commerce Department's calculations of duties based on both antidumping and countervailing measurements amount to “double counting” and has ordered Commerce to “forego the imposition of (countervailing duties) on the merchandise at issue.”
Commerce has 30 days to file its response.
Ironically, the case derives from a lawsuit brought Dec. 30, 2008, by OTR tire importer/marketer GPX International Tire Corp.—which since has gone bankrupt, in large part because of complications caused by the duties—against Bridgestone Americas Inc., Titan Tire Inc. and the United Steelworkers union.
Commerce's imposition of duties was the result of a petition filed in 2007 by the USW and Titan International Corp. seeking relief from Chinese OTR tire imports they claimed were causing material injury to U.S. OTR tire makers. Bridgestone later lent its support to the matter.
As a result, many Chinese OTR tire producers were hit with considerable duties, some as high as 210 percent.
The crux of the CIT's remand order is the way Commerce determined countervailing duties on goods from a “nonmarket economy,” or one where the open market has little or no influence on selling prices.
“(Commerce's) action à clearly demonstrates its inability, at this time, to use improved methodologies to determine whether, and to what degree, double counting occurs when (nonmarket economy) remedies are imposed on the same good à,” the court said in its ruling.