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Practice Areas

Higher AD Duties on Chinese and Vietnamese Goods Possible Under New Rule

Friday, August 02, 2013
Sandler, Travis & Rosenberg Trade Report

The International Trade Administration has issued a final rule revising its method of valuing the price of inputs in antidumping duty proceedings involving non-market economy countries. It appears that this change will make it easier for the ITA to calculate higher AD duty rates on goods from NME countries such as China and Vietnam. This rule will be effective as of Sept. 3 and applicable for all AD proceedings or segments of proceedings (e.g., investigations and administrative reviews) initiated on or after that date.

Under the revised regulations, when a factor of production of merchandise from an NME country is produced in one or more market economy countries, purchased from one or more market economy suppliers and paid for in market economy currency, the ITA will normally use the price paid to the market economy supplier to value that factor if substantially all of the total volume of the factor is purchased from the market economy supplier(s). “Substantially all” now means 85% or more, up from 33% previously. When the 85% threshold is not met, the ITA will normally weight-average the actual price(s) paid for the market economy portion and the surrogate value for the NME portion using the respective quantities of the input sourced from market economy and NME suppliers.

The ITA is also adding a requirement that the market economy input at issue actually be produced in one or more market economy countries, not just sold through them, to address concerns that the pricing of an NME-produced input by a market economy supplier (or reseller) can be distorted by NME cost or supply factors.

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