Tyre exports deflect US dumping duty

0
247
Throughout the last 18 months, the US Department of Commerce (DOC) conducted a major trade remedy investigation again Vietnamese producers of passenger and light vehicle tyres.
tyre exports deflect us dumping duty
Tyre exports deflect US dumping duty. Photo: freepik.com

In early 2020, the US tyre industry alleged that Vietnamese producers were engaged in dumping their tyres in the US market at less-than-fair-value prices and received illegal government subsidies. A full anti-dumping duty (ADD) and countervailing duty (CVD) investigation followed.

The largest Vietnamese producer, Sailun Co., Ltd., has a major presence in the country. After nearly a year of investigation, the DOC found that Sailun was not dumping its tyres in the US market and awarded the company a zero per cent ADD rate.

The DOC also found that only minor subsidies were being received by Sailun from the Vietnamese government and awarded Sailun a modest 6.23 per cent CVD rate.

After a nearly year-long intensive investigation by the US government, Sailun received the lowest combined rates, and as a result of GDLSK’s efforts, Sailun will be excluded from the DOC’s final ADD order on tyres from Vietnam. This means it will be excluded from the ADD case going forward.

This is quite a victory in any US ADD proceeding. GDLSK’s efforts also resulted in Sailun being assigned the lowest combined ADD and CVD rate of any company from any of the investigated markets of South Korea, Taiwan, Thailand, and Vietnam.

In fact, Sailun’s rates are markedly lower than any of its competitors in these other exporting countries. This should provide Sailun quite a competitive advantage over its regional competitors.

GDLSK has been practicing international trade law in Vietnam for over 20 years and this is one of the only US ADD investigations to ever result in a zero ADD rate with an exclusion from the ultimate ADD order.

This result is particularly notable since Vietnam is considered to be a non-market economy and the DOC uses “surrogate values” from other countries (for example India) to price out the production inputs of merchandise made in Vietnam. This can be highly subjective and prejudicial to Vietnamese companies.

In contrast, in market economy investigations actual costs and third-market prices are used to determine the level of dumping, making the ADD process far more predictable and manageable.

The fact that Sailun was not dumping its tyres in the US market demonstrates that companies subject to potentially crippling ADD and/or CVD liabilities can earn a favourable outcome if they are represented by able counsel and remain committed to fully responding to the DOC’s requests for information, including its very detailed verification requests.

It also illustrates the need for careful and detailed surrogate value research in third country markets. This is especially important in our current protectionist climate where prohibitive ADD and CVD rates are being assessed by the DOC in multiple investigations against various commodities in various Asian countries, particularly Vietnam.

With China experiencing increased trade tensions with the US, and a host of ADD and CVD trade remedy cases, special retaliatory duties, and other trade barriers, certain Chinese industries are moving production or assembly to Vietnam.

While this can be a boon to the Vietnamese economy, these types of transplanted industries can also attract the attention of US petitioning industries. Careful planning including pricing, costing, and origin audits of finished products are extremely valuable to protect Vietnamese companies from these US trade remedy actions.

GDLSK has worked with many Vietnamese producers and exporters to analyse their supply chain, production processes, and assess the value added in Vietnam to ensure that local origin is conferred and the finished product is not subject to duties covering Chinese goods.

In addition, GDLSK has undertaken many trade audits in a variety of industries to prepare Vietnamese producers for the very intensive and time consuming ADD and CVD investigations. This involves analysing the consumption of production inputs, calculating a comparison price using surrogate values and establishing US floor prices.

It also involves reducing the network of subcontractors or tollers that may be used inside and outside of the country and streamlining the supply chain, as well as establishing new distribution channels and terms of sale to the US market.

Careful planning and implementation of mitigating strategies can not only preserve the US market but give Vietnamese companies a distinct advantage over their competitors.

Sailun (Vietnam) Co., Ltd., located in Phuoc Dong Industrial Zone in the southwestern province of Tay Ninh’s Phuoc Dong ward, is a Vietnamese enterprise manufacturing all types of passenger tyres and light vehicle tyres. It exports primarily to the US.

The US tyre producers filed an antidumping and countervailing duty case against several countries, including Vietnam last year, alleging that producers from these countries, including Sailun, were selling their tyres in the US at less than normal value and damaging the US tyre industry.

US petitioners also alleged that tyre manufacturers in these countries, including Vietnam, were receiving unlawful government subsidies.

Andrew Schroth and Brandon Petelin Lawyers, GDLSK LLP

Nguồn: Vietnam Investment Review

Previous articleGolden rules for digital transformation success
Next articleKHỞI NGHIỆP ĐÀ NẴNG: Bứt phá từ tư duy hành động (Phần I)

LEAVE A REPLY

Please enter your comment!
Please enter your name here