Auto Sales Forecast to Fall 7%; 400% Anti-Dumping Duties for Chinese Mechanical Drives

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Photo: Hessam Bakhtiarzadeh

The Commerce Department has placed anti-dumping and countervailing duties on mechanical drive parts from Canada and China, some as high as 400% for the latter. U.S. auto sales are forecast to fall this month.

The Auto Sales Plateau Begins to Slope

U.S. auto sales are forecast to drop more than 7% in October from the same period in 2015, the sixth monthly decline so far this year, as automakers offer steep discounts and adjust production to manage inventories, J.D. Power and LMC Automotive said on Friday.

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This may be the fall from the plateau we have seen over the last few months of flat auto sales.

The two auto industry consultants said October U.S. new vehicle sales will number 1.347 million, down 7.3% from 1.453 million units a year earlier. The seasonally adjusted annualized rate for October will be 17.7 million vehicles, down from 18.1 million on the same basis a year earlier. This October has two fewer auto sales days than October of 2015.

The U.S. auto industry has experienced several years of robust sales and has not experienced six months of declines since before the Great Recession.

Steep Tariffs on Mechanical Transfer Drive Components

The Department of Commerce announced its affirmative final determinations in the anti-dumping duty (AD) investigations of imports of iron mechanical transfer drive components from Canada and the People’s Republic of China, and the countervailing duty  investigation of imports of the same from China.

In the Canada investigation, the sole mandatory respondent, Baldor Electric Company Canada, failed to respond to Commerce’s request for information; thus, Commerce calculated a final dumping margin of 191.34%, based on adverse facts available. Commerce also calculated a final dumping margin of 100.47% for all other producers/exporters in Canada.

In the China anti-dumping investigation, Commerce found dumping has occurred by mandatory respondent Powermach Import & Export Co., Ltd. (Sichuan) at a final dumping margin of 13.64%, while mandatory respondent NOK (Wuxi) Vibration Control China Co. Ltd. withdrew from participation and was treated as part of the China-wide entity. Commerce also granted separate-rates to certain companies at a final dumping margin of 13.64%. Commerce assigned a massive China-wide dumping margin of 401.68% for all other producers/exporters in China, based on adverse facts available.

In the China countervailing duties investigation, Commerce calculated a final subsidy rate of 33.26% for Powermach Import & Export Co., Ltd. However, for the other mandatory respondent, NOK (Wuxi) Vibration Control China Co. Ltd. (“NOK Wuxi”), Commerce based its final subsidy rate of 163.46% on adverse facts available because NOK Wuxi ceased cooperating in the investigation following the Department’s preliminary determination. All other producers/exporters in China were assigned a final subsidy rate of 33.26%. In addition, thirty companies which did not respond to the quantity and value questionnaire received a final subsidy rate of 163.46%, based on adverse facts available.

As a result of the affirmative final anti-dumping and countervailing duty determinations, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits for imports of the products.

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The investigations cover iron mechanical transfer drive components including sheaves (pulleys), flywheels, and bushings. Such iron mechanical components transfer power within machinery such as elevators, conveyers, and other material handling equipment.

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