Double Coin Holdings LLC and its American subsidiary, China Manufacturers Alliance LLC (CMA), plan to fight the U.S. Department of Commerce’s preliminary decision to impose a duty of 105% on CMA’s imports of off-the-road (OTR) tires.
The Commerce Department began an antidumping (AD) review in October 2013, at the request of petitioners in order to determine whether the AD rate assigned to Double Coin and CMA should be changed.
After the year-long process, the Commerce Department rendered its preliminary determination last week and determined that company’s sale prices were well above market economy costs of production. Using the company’s own sales and cost data, the Commerce Department calculated an effectively determined a zero percent (0.69%) new AD rate, according to Double Coin.
However, in a move based on policy change, Double Coin says the Commerce Department decided that it would ignore the actual data and impose a 105% AD rate on CMA’s imports of off-the-road (OTR) tires. The reason is the perception that a Chinese shareholder of Double Coin had influence in the manner in which CMA determined its U.S. selling prices. Double Coin says it is preparing an extensive counter in order to obtain a reversal when the Commerce Department renders its final determination.
“The Commerce Department’s justification for ignoring actual sales and cost data from CMA and Double Coin is questionable in our case,” says Dan Porter of Curtis, Mallett-Prevost, Colt & Mosle LLP, lead counsel for CMA’s review of AD duties. “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 antidumping duty of 105 percent.”
According to Porter, 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. “The Commerce Department assumed that this state-owned company influenced CMA’s U.S. sales of Double Coin tires.”
The Commerce Department says such conclusions represent a new “still evolving” change in policy about how to treat state-owned Chinese companies in anti-dumping cases, according to Double Coin. 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,” says 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 United States, 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.”
After hearing arguments from all parties, the Commerce Department will render its final determination in four to six months, according to Double Coin.
