For several years, imported truck trailers were cheaper than those manufactured in the United States. That may end soon.
Earlier this year, the U.S. International Trade Commission launched an investigation into trailers imported from Canada, China and Mexico. U.S. trailer makers have accused foreign manufacturers of selling trailers at less than fair value (dumping).
In addition to dumping allegations, the American Trailer Manufacturers Coalition claims some trailer importers are receiving foreign government subsidies that allow them to sell at lower prices. Such subsidies can be offset by countervailing duties, which are essentially tariffs.
According to the trailer group’s petition, dumping margins have been as high as nearly 300%, 1,400% and more than 430% from Canada, China and Mexico, respectively.
“Trade relief is necessary to remedy the injurious effects of unfairly traded van trailer products coming in from Mexico, China, and Canada that are severely hindering the ability of coalition members to compete fairly,” Robert E. DeFrancesco III, counsel to the American Trailer Manufacturers Coalition, said in a statement. “The application of antidumping and countervailing duties will level the playing field and save America’s trailer manufacturing industry.”
In February, the U.S. International Trade Commission released its preliminary determination. The verdict? There is “a reasonable indication” that U.S. manufacturers are being injured by imports allegedly being sold at less than fair value and subsidized by Canada, China and Mexico.
What does this mean?
U.S. trailer makers have cleared the first hurdle in the investigation, but several more are ahead.
The federal government announced the investigation last November, but the entire process could take up to a year or longer. The International Trade Commission’s preliminary determination simply allows the investigation to move forward.
Next up is the Department of Commerce, which also must submit a preliminary determination. That is when money can start being collected. Specifically, the department could estimate how much damage is being caused and require a deposit from importers.
For example, if Commerce finds a 20% antidumping margin in its preliminary determination and a countervailing rate of 5%, it could collect $25,000 on a $100,000 shipment. That deposit will be refunded if the investigation absolves the importers of wrongdoing, or adjusted if it concludes in the affirmative.
That could happen sometime this spring or summer. After that, a final determination by both the Department of Commerce and International Trade Commission could come at the end of the year. A final order will be issued soon after. LL
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