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November 02, 2016 02:00 AM

Error causes tire duties to increase

Tire Business Report
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    WASHINGTON—The Department of Commerce has recalculated upward the preliminary antidumping duties on Chinese truck and bus tires to account for two errors it made in determining the preliminary rates it issued this summer.

    The net effect of the revision is that all Chinese truck and bus tires will be assessed the same antidumping duty of 30.36 percent, which is a change of nearly 8 percentage points for most companies.

    The revision is tied to errors Commerce made in calculating the estimated weighted-average dumping margin for Prinx Chengshan Tire Co. Ltd., which is identified as a “mandatory respondent” by the Commerce Department.

    The department noted a ministerial error is either a mathematical error or clerical error, and a significant error is one that either singly or in combination with other errors would result in a change of least 5 percentage points in the weighted-average dumping margin, provided the change is not less than 25 percent of the average.

    In a memorandum dated Oct. 6, Commerce noted the errors related to “weight averaging per piece of subject merchandise” and “domestic warehousing surrogate cost.” Commerce revisited its calculations based on petitions from the United Steelworkers union and PCT itself.

    It is unclear at this point whether the Commerce Department or Prinx Chengshan was responsible for the errors of calculation, according to Walt Weller, senior vice president of Monrovia, Calif.-based China Manufacturers Alliance L.L.C., exclusive distributor of Double Coin tires in the U.S.

    “But I think that, in either case, taking their data and applying an additional duty to everyone else is an unjust application of the process,” Weller said.

    “If they record the data incorrectly, but everyone else reports it correctly, why should I pay the penalty?” he said. “It's a continuing, never-ending situation where the Commerce Department seems to be making up the rules as they go along.”

    The United Steelworkers union, which petitioned for antidumping and countervailing duties against Chinese truck and bus tires, commended the Commerce Department.

    “We value the due diligence work of the U.S. Department of Commerce in all of the many trade cases filed by the USW,” the union said in a statement. “The USW understands a mistake can happen. We appreciate the efforts made by the government investigators to correct it once they were made aware.”

    According to the original preliminary determination, PCT—as the only mandatory respondent eligible for a separate rate—was assigned a dumping rate of 20.87 percent, whereas all other Chinese companies were assigned a rate of 22.57 percent.

    Once Commerce factored in the two errors, however, PCT's rate increased to 30.36 percent, the department said.

    Since this now negated PCT's status as the sole mandatory respondent, Commerce opted to apply the new, higher rate of 30.36 to all other companies, using the principle of “adverse facts available” to remedy the situation.

    The collection of cash deposits and suspension of liquidation will be revised accordingly, Commerce said. The amended cash deposit rate, which takes into account the deduction of the export subsidy rate of 0.41 percent, will be 29.95 percent.

    Because it is an increase from the preliminary determination, the amended cash deposit rate will be effective on the date of publication of this notice in the Federal Register, Commerce said.

    The dumping duties are in addition to countervailing duties that Commerce also put into place this summer.

    The countervailing subsidy rates, according to the June 28 preliminary determination, are 17.06 percent against Double Coin Holdings Ltd.; 23.38 percent against Guizhou Tyre Co. Ltd.; and 20.22 percent against all other Chinese truck/bus tire producers and exporters.

    Commerce is due to issue its final determination on the antidumping duties investigation no later than Jan. 17. If that decision is affirmative, the International Trade Commission—a unit within the Commerce Department—will make a final ruling on material injury no later than March 3.

    Miles Moore, Rubber & Plastics News staff, contributed to this report.

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