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U.S. Department of Commerce Increases Duties on Diamond Sawblades from China

October 13, 2011

Today, the U.S. Department of Commerce determined that certain Chinese producers and exporters of diamond sawblades have been underpaying antidumping duties on their products and formally declared that these producers are subject to a duty rate of 164.09 percent.

Commerce's decision concerns Chinese producers/exporter Hebei Jikai Industrial Group Co. Ltd. and Hebei Husqvarna-Jikai Diamond Tools Co., Ltd. In 2006, Commerce issued an antidumping determination regarding diamond sawblades and sawblade parts from China. Pursuant to that determination, most Chinese diamond sawblades/parts are subject to a U.S. tariff of 164.09 percent. However, diamond sawblades manufactured and exported by Hebei Jikai--and only Hebei Jikai--are subject to a tariff of 48.5 percent.

After Commerce made its dumping determination, Hebei Jikai entered into an agreement with Husqvarna Holding HB to create a joint venture, Husqvarna JV. This new company then began to export sawblades to the United States using Hebei Jikai's tariff rate. After being alerted to the situation by the Diamond Sawblades Manufacturers' Coalition (DSMC), a U.S. trade group, Commerce initiated an investigation and has now formally declared that Husqvarna JV is subject to the 164.09 percent rate. This rate applies to sawblades and sawblade parts that the joint venture purchases from Hebei Jikai, as well as its self-produced merchandise.

"We are extremely pleased that Commerce has halted this abuse of the antidumping duty laws," stated Daniel B. Pickard, a partner in the International Trade Practice of Wiley Rein LLP and counsel to the DSMC. "Commerce's decision not only ensures that importers will be required to pay the full amount of duties that they owe, it protects American sawblade companies and their workers from these unfairly priced imports."

Commerce's decision not only confirms that future imports manufactured or exported by Husqvarna JV are subject to duty deposits of 164.09 percent, but has the potential to retroactively result in increased duties on previously entered sawblades manufactured or exported by Husqvarna JV. Commerce is currently considering the final duties for these products in a separate proceeding.

The DSMC first requested that Commerce take action to investigate Husqvarna JV in 2010, after determining that import patterns had changed radically in the wake of the company's creation. "We actively monitor import patterns in order to ensure the effectiveness of the antidumping duty order," commented Mr. Pickard. "Today's results demonstrate how those efforts pay off, ensuring the continued health and viability of the U.S. industry."