Confused on antidumping? You’re not alone; here’s some help on our latest stories
Sourcing Strategies
Thomas Russell -- Furniture Today, August 14, 2007
Last week we reported on furnituretoday.com two important developments relating to the antidumping case on Chinese-made wood bedroom furniture.
One dealt with final duties imposed for goods shipped between June 24, 2004, and Dec. 31, 2005. The other named Chinese companies that got their names off an administrative review list for 2006.
If anyone was confused by both stories, we understand. The entire antidumping case has been a difficult one to grasp for most laypeople – ourselves included. When you throw in these two developments in the same week, it can get anyone confused, including, but not limited to, the manufacturers and their importers of record.
To help put things in perspective, we attempt here to further clarify some key points.
First and foremost, these duties, which are collected via the Byrd Amendment, are assigned to the factories, but are paid by whoever imported the goods to the U.S. from those factories for that period of time. These could include any number of the hundreds of furniture companies that show wood bedroom furniture at the High Point and Las Vegas markets. Others could be whoever gets a container shipped directly from the factory, including a retailer or agency representing that organization.
While the U.S. Department of Commerce first announced the antidumping duties in 2004, the rates have been subject to change. One example occurred when the Section A rate of 6.65% rose to 7.24% last fall as Lacquer Craft Mfg. had its duty eliminated.
But these figures only represented the cash deposit rates for goods shipped to the U.S.
A final retroactive duty would be assessed during what’s called an administrative review.
Through this process, the government allows the U.S. manufacturers that supported the initial antidumping investigation to identify factories whose shipments they believe should be further scrutinized. Or, a Chinese factory can put its own name on the list in hopes of getting its duty lowered.
This first administrative review occurred in 2006 and affected goods shipped between June 24, 2004, and Dec. 31, 2005. The final results of this first review were announced last Thursday, and the final duties ranged from 0.53% to 216.01%. The rate for some 41 factories that qualified for a separate rate, but did not get an individual review, was 35.38%. Most of factories named on the list got this rate.
Other factories that got their name off the first review list locked into the Section A rate, which was 6.65% for most of the review period.
An importer of record dealing with a factory assessed at a higher rate would pay the difference between the initial duty and the final duty for goods shipped during this period. Thus, a factory that was assessed at 35.38% for this review period would pay a difference of 28.73% on goods shipped during that period. If they paid a preliminary duty that was higher for a portion of that period, the difference would be smaller.
The list with the names of companies that got off the 2006 review list is significant too, because they locked into the Section A rate for goods shipped in that year. That means they will continue to be assessed at that rate moving forward and not be subject to potentially higher duties during the 2006 administrative review. Those results will be published next year.
For at least one reader, the list is meaningless without the names of importers of record attached to the factories. That list is difficult to obtain. But even with those names, it’s not clear what portion of that company’s bedroom comes out of a given factory.
Remember too that the goods shipped from these factories during this time period likely have been sold to consumers, meaning the importers of record will have had to account for such duty increases in their budgets. Those same companies also may have moved on from the high duty factories, meaning new product may not be impacted by the new rates.
Furniture|Today will continue to report on this issue to shed further light on the process and what it means to the industry. But this case also illustrates why it’s so important to have good communication with your vendor or supplier. It’s in everyone’s best interest to talk openly about the issue and determine the effect on consumers and the marketplace in general.
Below are links to each story
http://www.furnituretoday.com/article/CA6467373.html
http://www.furnituretoday.com/article/CA6466150.html
