Auburn Manufacturing, Inc. (AMI) welcomes the August 25, 2016 preliminary antidumping determination by the U.S. Department of Commerce (DOC) that Chinese manufacturers have been selling amorphous silica fabric (ASF) in the United States are unfairly low prices. ASF is used to insulate and resist extreme heat in industrial applications.
The unfair pricing of these imports allows Chinese producers to sell ASF at artificially low prices in the U.S. market, unfairly undercutting U.S.-made products. DOC calculated a preliminary antidumping margin of 162.47% for all companies, and will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits on all imports of Chinese ASF in an amount equal to 162.47% of the import’s declared value. Not only will importers be required to pay the additional 162.47% antidumping duty cash deposit on future entries, but DOC ruled that 162.47% antidumping duty cash deposits will be owed going back to product imported in the beginning of June 2016. These antidumping duty cash deposits will be in addition to the countervailing duty (CVD) cash deposits the DOC has required on Chinese imports since the end of June 2016 to offset unfair subsidies by the Government of China.
For one of the two Chinese producers examined, the DOC concluded that the producer failed to cooperate in the investigation. As a result, the DOC rejected all of that company’s data. The DOC also cited other questionable statements and documents submitted by that Chinese producer that prompted the DOC to refer certain matters to CBP for a follow-up investigation. Ordinarily, as a penalty for non-cooperation the DOC would have imposed an AD margin on that producer equal to the margin of dumping that AMI alleged in the petition. However, the DOC concluded that data submitted by the other Chinese producer showed dumping at even greater magnitude than alleged in the petition, so the DOC decided to apply the higher margin to the uncooperative Chinese producer.
Kathie Leonard, President/CEO of AMI called the imposition of provisional AD cash deposits a very important step in curbing the tremendous increase in Chinese ASF imports. “We’re not out of the woods yet, but at least we see some daylight ahead of us,” Leonard said. “We’ve proved that the Chinese price isn’t a result of cheap labor when making advanced textiles like ours. It’s based on unfair pricing by Chinese producers and subsidies provided by the Chinese government to encourage exports – specifically aimed at the US market.”
As the largest American producer of industrial grade ASF, AMI is the principal supplier of the product to the U.S. Navy. These duties will allow AMI to remain a viable supplier to the Navy and its subcontractors. Leonard said, “With these provisional antidumping duty cash deposits in place – up to 267% with countervailing duty included, we’ll be back on a level playing field, and that’s all we need to compete.” She continued, “Our quality and service are already well above that of the importers, and the market knows that. The volume of business we’ve lost is only because of unfairly low prices of the Chinese product due to unfair trade practices. With the Department of Commerce’s help, we’ve now confirmed that.”
Final determinations of both investigations are scheduled for mid- January 2017. For both AD and 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 “material injury” (or threat thereof) by reason of the dumped and/or subsidized imports. The injury determination will be completed by the U.S. International Trade Commission the end of February 2017.