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Tariff Update: Taiwan Tiremakers Propose Settlement with DOC

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Under the agreement, companies want the U.S. Department of Commerce to set a "reference price" for products currently under investigation. 

Four Taiwan-based tire manufacturers have proposed a settlement with the Department of Commerce (DOC) that if successful, could result in the suspension of the U.S. government’s anti-dumping investigation into their passenger and light truck tire exports.

The companies include Cheng Shin Rubber Ind. Co. Ltd., which does business as Maxxis; Federal Corp.; Kenda Rubber Industrial Co. Ltd.; and Nankang Rubber Tire Corp. Ltd.

In the draft of the agreement, which was filed Jan. 13, the tiremakers note that there are "extraordinary circumstances" present in the investigation "because the suspension of the investigation will be more beneficial to the domestic industry than the continuation of the investigation." It also notes that the investigation is complex.

Under the proposed agreement, the companies want the DOC to set a "reference price" for the products currently under investigation. And until those prices are set, the companies would agree not to sell products into the U.S.

Once the price is established, it would be good through the end of September. A new price would be calculated quarterly. In the event the price for a quarter ends up being incorrect for any reason, the tiremakers say the DOC could adjust the next period's price as necessary.

The agreement also notes the signatories would agree to provide the DOC with an electronic sales record of all of its sales of the subject merchandise. The first report would be due Oct. 31, 2021, and reports would continue each quarter thereafter.

This proposed settlement comes on the heels of a Dec. 30 announcement that the DOC had “preliminarily determined that exporters” from those countries “have dumped passenger tires in the U.S.” at rates of 14.24% to 38.07% for South Korea, 52.42% to 98.44% for Taiwan, 13.25% to 22.21% for Thailand and up to 22.30% for Vietnam.

Specifically, the DOC stated that it would apply duties of 52.42% to tires made by Cheng Shin and duties of 98.44% to tires made by Nankang.

If this agreement isn't accepted by the DOC, and likely by the primary petitioner in the case, the United Steelworkers, the DOC is scheduled to announce final determinations on or about May 14, 2021, unless that deadline is extended.

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