The U.S. Department of Commerce on Monday announced its affirmative final determinations in the antidumping duty investigations of Passenger Vehicle and Light Truck Tires (PVLT) from South Korea, Taiwan, Thailand, and Vietnam, and affirmative final determination in the countervailing duty investigation of PVLT from Vietnam.
The final ruling largely upheld a preliminary determination that the subject goods were being sold in the U.S. at less than fair value and that in the case of Vietnam, exporters were benefiting from undervaluation, which Commerce has started treating as a de facto government subsidy.
According to a fact sheet on the decision, 2019 imports of passenger tires from the countries under investigation were approximately valued at $4 billion.
As a result of the latest decision, anti-dumping tariffs ranging between 14.62% and 101.84% will be imposed on tire makers from South Korea, Taiwan, Thailand, and Vietnam.
Taiwan faces the highest penalties with Nankang Rubber Tire Corp. and Cheng Shin Rubber Ind. Co., being assessed tariffs of 101.84% and 20.04%, respectively, while an 84.75% rate has been imposed on other Taiwanese exporters.
Commerce has also decided to impose tariffs ranging between 14.62% and 21.09% on tire exporters from Thailand, 14.72% to 27.05% on South Korean exporters, and up to 22.27% on tire makers from Vietnam. Additionally, the agency has determined that countervailing tariffs from 6.23% up to 7.89% are also applicable to tires coming from Vietnam.
Currency Manipulation as Subsidy
A noteworthy feature of this case is the employment of a relatively new policy that enables Commerce to treat currency undervaluation as a “subsidy” for purposes of determining countervailing tariffs.
Vietnam disputes the use of this rule, however, arguing that Commerce lacks authority to investigate and countervail such programs under domestic or international trade law. Moreover, it contends that “calculation of a precise rate of benefit from a so-called undervalued currency is arbitrary and capricious as there is no universally accepted methodology for quantifying how much a currency is undervalued on a bilateral basis.”
Commerce maintains that its decisions are consistent with both domestic law and U.S. commitments under the World Trade Organization’s Agreement on Subsidies and Countervailing Measures and therefore dismissed Vietnam’s arguments as having “no merit in this regard.”
The U.S. International Trade Commission has been conducting ongoing investigations into whether a U.S. industry has been materially injured by dumped tire imports from the four South East Asian countries and is expected to make its final injury determinations on or about July 5, 2021. Orders will be issued on July 12, 2021 in the event of affirmative final determinations from both Commerce and the ITC.