Another twist: One tariff is on hold!

July 23, 2015

If the process that lead to the imposition of tariffs hasn’t left you confused already, this might do the trick. Importers of tires from China aren’t being billed for both the anti-dumping (AD) and countervailing (CVD) duties.

U.S. Customs and Border Protection (CBP) has confirmed importers are only paying the AD duty, plus the longstanding 4% rate.

The explanation is cumbersome, but it boils down to the fact that the tariffs on passenger and light truck tires from China began as two separate investigations — an AD investigation, and a CVD investigation. Generally, CBP says “the deadline for the preliminary determination in a CVD investigation is several months prior to the deadline in an AD investigation. As a result, a provisional measure may go into effect much earlier in a CVD proceeding than they will in a companion AD proceeding.”

Commerce issued its preliminary CVD ruling on Dec. 1, 2014. (It then amended that ruling on Dec. 30, 2014 due to ministerial errors.) It didn’t publish its AD ruling until Jan. 27, 2015.

Once those preliminary rulings were published, Commerce ordered CBP to collect the “provisional” tariffs. But CBP says, “based on the governing statutes, in accordance with the World Trade Organization agreement on subsidies and countervailing measures, provisional measures may only be in effect for a limited amount of time. Thus, the CVD provisional measures usually expire prior to provisional measures in a companion AD proceeding.”

The fact that Commerce and the U.S. International Trade Commission ultimately merged the two investigations and put them on the same timeline for final approval made the issue a bit easier to track. But it also meant the final CVD order wouldn’t come within the required statutory timeline, creating this gap.

But there’s more.

CBP says in AD cases “provisional measures may remain in effect for not more than six months.”

That means the clock is ticking on the provisional AD rates as well, as the Jan. 27 order expires on or around July 27.

Modern Tire Dealer is working on the ultimate question — when will importers and manufacturers begin to pay both tariffs?