Three Cases of Chinese Auto Parts Dealing with Anti-Dumping in Foreign Countries

Windshield: Fuyao Glass made a phased victory against US anti-dumping. The U.S. Department of Commerce announced the preliminary results announcement on the administrative review of windshield glass from China. Fuyao Glass exported its windshield to the United States in 2001. The preliminary dumping rate for the administrative review from September to March 2003 was reduced from the original 11.80% to 0.13% (less than 0.5% is regarded as a zero dumping rate). This trade friction can be traced back as early as three years ago. In March 2001, the U.S. Department of Commerce began anti-dumping investigations on the production of 31 windshields in China at the request of three U.S. glass manufacturers including PPG. Among the 31 Chinese glass companies, the largest is Fuyao Glass. Of all the windshield products exported to the United States from China, Fuyao holds a 70% share. At the same time, the Chinese automobile windshield occupies a considerable market in the United States, and Fuyao has a 12% market share in North America. Fuyao Glass then hired an American lawyer to respond. This response took more than three years, during which a great deal of work was done in all aspects. In fact, the CEO of the American Glass Sales Industry Association (Independent Glass Committee) does not agree with the three American companies: “The reason why the prices of Chinese glass manufacturers are low may be because they have found a way to save costs. If so, US companies should learn from China's practices.” Industry insiders said that the core of the anti-dumping case is that the US Department of Commerce refused to use raw materials costs imported by Fuyao Glass from other countries, because the US Department of Commerce believes that these imported materials are “possible”. Received government subsidies. A responsible person of Fuyao stated that Fuyao did not have four reasons for dumping: First, more than 65% of Fuyao Glass's main raw materials for export products are purchased from abroad, so the cost is fair; Second, Fuyao As a foreign-owned private listed company, this mechanism determines that the company's operations can only be market-oriented; Third, Fuyao Glass accounts for 60% of the number of similar products exported to North America, while sales account for more than 70%. Therefore, Fuyao Glass has no lower export prices than domestic counterparts, or even the highest; Fourthly, the financial auditing of Fuyao Glass is performed by the internationally renowned Andersen Certified Public Accountants. Therefore, the financial report issued by the firm is absolute. Authoritative, Fuyao Glass's profit of RMB 150 million in 2000 was entirely derived from auto glass sales, with a net profit margin of nearly 20%, and a net profit margin of up to 25% in the North American market, indicating that its export price is much higher than its domestic market price. . If the U.S. Department of Commerce announces that the final dumping rate after 2 months is still less than 0.5%, then Fuyao will win the final victory. By that time, anti-dumping duties paid in September 2001 will be refunded to the company. In the anti-dumping response of Canadian companies before this, Fuyao Glass won a complete victory. The Canadian case was also filed by PPG, a glass producer. PPG is headquartered in the United States. 95% of the glass sold in Canada is imported from the United States. Its registered factory production in Canada only accounts for 5% of sales. At the end of 2001, the Canadian International Trade Court accepted the PPG company's complaint and issued an anti-dumping investigation notice to the Chinese auto glass industry including Fuyao. According to relevant reports, on August 30, 2002, the Canadian International Trade Court (CITT) ruled that the sale of automotive glass from China in Canada does not constitute an infringement. After winning the case, the original Canadian Customs and Revenue Agency (CCRA) was able to reduce the waived 24.09% of the dumping tariff of Fuyao Glass. This alone brought more than 10 million profits to Fuyao. Bearings: Chinese ball bearing anti-dumping won the case On February 13, 2002, the United States International Trade Commission (USITC) and the United States Department of Commerce (DOC) received an application from the American Bearing Manufacturers Association (ABMA) for ball bearing products from China and Its parts are subjected to anti-dumping investigations. Ball bearings are widely used mechanical parts in many fields such as machinery industry and transportation industry, and are one of the largest electromechanical commodities that China has exported to the United States in excess of 100 million U.S. dollars. The anti-dumping investigation filed by ABMA involved the amount of my export goods to the United States exceeding 300 million U.S. dollars. This is just two months after China's formal accession to the WTO, the United States ABMA used the "anti-dumping" trade rules allowed by the WTO trade rules to try to block Chinese products for the first time. Once the Chinese ball bearing company loses the lawsuit, it will face an anti-dumping tax of 17% to 246%, and will accept the DOC's annual review of the case every year thereafter. The DOC will once again determine the annual anti-dumping tax rate. Therefore, losing the case means that Chinese ball bearing companies will gradually be squeezed out of the US market. The China Chamber of Commerce for Import and Export of Machinery and Electronic Products immediately took the position as the representative of all Chinese export-oriented ball bearing manufacturers in the US International Trade Commission. On April 29, 2002, the USITC made an affirmative first-year referee decision. Members believe that although there was a lot of evidence during the preliminary investigation stage of the survey, the products under investigation may not necessarily cause damage to the U.S. industry, but they also cannot reach the conclusion that the evidence has been satisfied at this preliminary stage. At the stage, the statutory standard for a negative decision is made. The voting result of the five members of the USITC was 3:2. The Chinese side faltered with a weak disadvantage. On April 10, 2002, the U.S. Department of Commerce issued the first questionnaire to thoroughly understand the situation of China's bearing manufacturing companies. Zhejiang Xinchang Peel Bearing Co., Ltd., Wanxiang Group, Ningbo Cixing Group (later urged by the Chinese side, the US Department of Commerce, etc.) and other three companies are sampling companies, and 45 enterprises including Jing Chi and Jin Peng submitted SECTIONA. The United States Department of Commerce has been granted the qualification to obtain a weighted average tax rate. After a 140-day investigation, the Ministry of Commerce announced on October 15, 2002 that the separate tax rates for the sample companies Peel, Wanxiang, and Cixing were: 2.39%, 39.93%, and 32.69% respectively. 45 Chinese companies received a weighted average tax rate of 22.99%, and all other Chinese companies that did not participate in the survey had a tax rate of 59.3%. However, the Chinese found that the U.S. Department of Commerce had made major mistakes in calculations and questioned them. On November 20, 2002, the Ministry of Commerce announced again that amendments were made to the preliminary findings: the separate tax rates for Peel, Wanxiang, and Cixing were 2.39%, 2.50%, and 2.32%, respectively; the weighted average tax rate for 45 Chinese companies was 2.41%. All other Chinese companies that did not participate in the survey were still taxed at 59.3%. In November and December 2002, officials of the Ministry of Commerce conducted field inspections of three companies Peel, Wanxiang, and Cixing, and announced the final results of the dumping investigation on February 27, 2003: Peel, Wanxiang, and Cixing. The separate tax rates were 8.33%, 7.22%, and 0.59%, respectively; the weighted average tax rate for 45 Chinese companies was 7.8%; and for all other Chinese companies that did not participate in the survey, the tax rate was still 59.3%. In the face of the tax rate announced by the US Department of Commerce, it is difficult for Chinese companies to continue exporting to the United States, and the frequency and quantity of orders placed by US importers have started to decrease. In order to avoid China’s bearing industry falling into the quagmire of administrative review year after year, and occupying a large amount of manpower, material and financial resources, the only way out for China is to seek no harm at the final stage of the USITC, which is also the last chance in this case. At the USITC Industry Injury Investigation Hearing held on March 6, 2003, the Chinese government adjusted its strategy in a timely manner and launched a powerful counterattack against ABMA with a large number of uncontroversial views and evidence. The facts show that China's ball bearing products have neither caused industrial damage to the United States nor threatened damage. In the early hours of April 4, 2003, the US International Trade Commission determined that Chinese ball bearings did not cause any harm to the American bearing industry with an absolute majority of 4 to 0. The case of dumping ball bearings from China was not established. At this point, the anti-dumping lawsuit against China's ball bearing products ended with the victory of the Mechanical and Electrical Products Branch of the China Chamber of Commerce and Industry. Brake discs: More than 30 companies enjoy zero tax rate in the United States China is a big country in international trade, but due to the level of technology, auto parts exports do not dominate, and most of the export products are low-tech, labor-intensive and raw materials-intensive. Products, of which the brake disc is an important one. Because the brake disc process is mainly completed by casting, it is not a high-tech product and the pollution during the manufacturing process is relatively large. Developed countries like the United States rarely produce by themselves, and their domestic market mainly depends on imports. For some time before 1996, China's brake discs and brake drum products had been very popular in the US market. At that time, the exporters were busy accepting orders and manufacturers overtime to find tasks. The market was surprisingly good. Manufacturers are optimistic about the market prospects of this product, many companies invested heavily in additional equipment, expand production, hoping to get a share in this extremely hot market. However, the good times are not long. The anti-dumping of the United States came, and 25 production companies and exporters were appealed by the relevant US manufacturers and were respectively punished from a zero tax rate to an average tax rate of 43% to a high tax rate of 86%. Although the brake drum was not sentenced to "treasure" in the end, the brakes were not spared. The result of such a penalty is unbearable for the enterprise. According to one CEO, “It was dumped and the loss was so large that it was impossible to say it. It was extremely miserable!” Many companies’ markets are mainly exported, but now, exports do not Going on, the domestic market is extremely limited and the results can be imagined. It is learnt that of the 25 companies accused, many have gone bankrupt because they did not have an export market, some are in a paralyzed state, and others are seriously injured. Five years ago, when several brake companies were anti-dumped, he had advised several of them to respond, but several companies were unconvinced. Now, these families have either collapsed or survived. Some domestic enterprises have no active awareness of anti-dumping investigations against foreign countries, while foreign anti-dumping laws stipulate that if companies are involved in non-appeals, the department in charge of the case can directly make a default judgment. In the anti-dumping case of brakes five years ago, eight companies were sentenced to zero tax rates. Some companies had hopes of winning the lawsuit, but most companies did not respond. As a result, companies could not re-export in response to the high tax rate, and responded to the enterprise. Many have achieved success. A person familiar with the matter said that although the United States has imposed anti-dumping measures on China's brake disc products, in recent years, China's brake disc exports to the United States have not only not decreased, but have instead doubled, and some companies only exported them last year. 3000 containers. At present, China has more than 30 brake disc export companies in the US market is a zero tax rate. Source: China Automotive News

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