DOC ruling has both sides claiming victories—again

Home Inside FCNews DOC ruling has both sides claiming victories—again

HICKSVILLE, N.Y.—The Department of Commerce (DOC) on May 20 came down with its latest preliminary ruling in the federal case against Chinese suppliers of engineered wood floors by some U.S. flooring manufacturers. This one dealt with the antidumping (AD) duty investigation part of the case. In late March, it gave its preliminary determination in the countervailing duty (CVD) investigation.

And like the initial ruling (FCNews, April 4/11), both sides took positives from the decision, followed by caution that this was only a preliminary ruling and things could change by the time the government issues its final rulings later this year.

This is because DOC “preliminarily determined that Chinese producers/exporters have sold multilayered wood flooring at margins ranging from zero to 82.6516% ad valorem.”

Of the three mandatory respondents in the case— Zhejiang Yuhua Timber Co. (Yuhua), Zhejiang Layo Wood Industry Co. (Layo) and Samling Group (Samling)—DOC deter- mined the first two are subject to preliminary de minimis dumping rates of 0% while Samling received a preliminary dumping rate of 10.88%.

It noted the petitioner, the Coalition for American Hardwood Parity (CAHP), an ad hoc association of U.S. manufacturers, alleged targeted dumping on a regional- and customer-specific basis for all three mandatory respondents. And even though DOC “found targeted dumping with respect to sales made by Layo and Samling…the margin for Layo remains de minimis” (of insufficient significance to warrant judicial or tax attention).

Beyond the three mandatory respondents, DOC said 73 additional exporters qualified for the same rate of 10.88% given to Samling, and all other Chinese producers/exporters are subject to the China-wide preliminary dumping rate of 82.65%.

So what does all this mean? It depends on which side you ask. Jonathan Train, import product manager of Swiff-Train and president of the Alliance for Free Choice and Jobs in Flooring (AFCJF), a group of flooring distributors, retailers and importers created to opposed the petition, said “We applaud DOC for its conscientious efforts that resulted in finding zero as an antidumping rate for two of the three mandatory companies. The fact that the third mandatory received a rate of only 5% of what the petitioners had originally demanded proves our point the claims were exaggerated and wildly inaccurate.”

A week before the ruling was announced Train sent a letter to AFCJF members stating a not-so-favorable decision could be made based on numerous factors. He noted, the DOC has been “inundated with thousands of pages of conflicting documentation…[and] it will take time to sort through the paperwork.”

Adding to his worries was the case had very recently been transferred to a different section at the DOC with a new supervisor taking over the case. “This is likely to make it even more difficult for the Commerce team to sort the wheat from the chaff in the limited time they have.”

Based on these, he warned the cards seemed “stacked against us under even the best of circumstances,” and as a result the rate could be “highly inflated and not reflect the realities of the situation.”

But, based on the actual ruling, Train said, “This means that more than 95% of imported flooring will receive the rate of 10.88% and much of it will enter at zero. The ‘all industry’ rate of 82.6% applies only to an insignificant amount of imports.”

Petitioners clap

Jeff Levin, counsel for the CAHP, which includes the following members:, Anderson Hardwood Floors, Award Hardwood Floors, Baker’s Creek Wood Floors, From the Forest, Howell Hardwood Flooring, Mannington Mills, Nydree Flooring and Shaw Industries Group, said DOC called its decision “affirmative.”

He said this means “imports from more than 70 Chinese producers/exporters are now subject to a deposit requirement for estimated antidumping duties of 10.88%. [Plus] over 100 other producers, which together represent the majority of manufacturers in that country, are subject to an antidumping duty deposit requirement of 82.65%.”

In other words, he explained, “Even with the 0% rates that were preliminarily assigned to two of the producers, the vast majority of imports of China—more than three- fourths—are now subject to dumping duty deposits.”

Don Finkell, president of Shaw Hard Surfaces/Anderson, told FCNews “We are happy [the government] held all of the products into the petition and granted no loop-hole…All in all 188 of 190 companies in China were found to be dumping engineered wood flooring in America. Now we have to get the percentages right.”

Levin pointed out the dumping margins are added to the preliminary CVD margins issued in March. “The vast majority of imports from China are subject to a total duty deposit requirement of at least 13%, with a significant portion subject to a combined rate of 109%.

Next step

With the preliminary rulings out both sides are now digging in their heels for what appears to be a long summer of presenting more information to DOC so it can make its final determination, which is expected to be in August. Part of this includes on-site verification of the information presented in questionnaire responses by the Chinese producers.

Then, if DOC makes an affirmative final determination, and the U.S. International Trade Commission (ITC) makes an affirmative final determination that imports of engineered wood flooring from China “materially injure, or threaten material injury to, the domestic industry,” DOC will issue an AD order. ITC is scheduled to make its final injury determination on or about Sept. 16, which would then be followed by an “Issuance of Order” about a week later.

Between now and then, both parties note a great deal can happen.

“The dumping rates issued are preliminary,” Levin noted, “and subject to change.” When the smoke clears, he said CAHP “fully expects the final rates to be substantially higher than the margins just issued.”

As expected, the opposition has different thoughts about the final outcome. “We are confident the rates announced at that time will be even lower,” AFCJF’s Train said. “The [current] result affirms our belief that the whole case will be dismissed at the ITC final.”

For more on CAHP, visit usfloorparity.org.

For more on AFCJF, visit choiceandjobs.com.

For more on the government’s investigation, visit usitc.gov.

-Matthew Spieler

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