Anti-dumping tariffs become double-edged swords and deep tools to the US exports against the market

Tariff deposits become a double-edged sword. Under normal circumstances, products are subject to anti-dumping duties, which is not good news for export enterprises, because the increase in importer costs brought by anti-dumping duties will be reflected in the increase in the sales price of importing countries. , which has an adverse effect on sales volume.

Since November 2009, the US Customs has imposed a tariff deposit on the diamond circular saw blades and components imported from the company's wholly-owned subsidiary, Boshen American Co., Ltd., at a rate of 35.51%. In 2009 and January-June 2010, Boshen paid US$227,883.90 and US$917,219.78 respectively. The company has hired a lawyer to prepare for the annual review and plans to apply to the US Department of Commerce for the first annual review in November 2010 in an effort to achieve a lower tax rate.

According to the data released by Boshen Tools, the company’s wholly-owned subsidiary, Boshen American Co., Ltd. (hereinafter referred to as “Boshen USA”) paid a tariff deposit of US$227,883.90 in November-December 2009, which was paid in the first half of 2010. The customs deposit is US$917,219.78. The reverse price of 35.51% can be used to obtain the export value of Boshen Tools to the United States during the above two periods: 641,475.71 USD for November-December 2009 and USD 2,582,990.09 for the first half of this year. Based on the average monthly export volume, it is found that the company’s exports to the US and the US in 2010 have increased by 34% compared with last year.

Why is the export of Boshen's tools to the US against the market?

The person in charge of the Boshen tool interviewed by the "Securities Daily" reporter said that the company had fully considered the factors of the anti-dumping tariff guarantee imposed by the US Customs when formulating the 2010 annual business plan, and therefore made adjustments to the US export structure, focusing more on Exported products that were not included in the anti-dumping investigation.

The more important factor driving sales growth is that the case is still in the preliminary stage, 35.51% is only the temporary tariff rate imposed on importers, and the US Department of Commerce will determine the anti-dumping tax rate in the November 2010 annual review. If the US Department of Commerce finalizes the anti-dumping tax rate higher than the current 35.51%, the importer will have to pay the difference between the two, which brings uncertain risks to the future operation of the importer.

However, if the importer chooses to purchase from Boshen, a wholly-owned subsidiary of Boshen Tools, although Boshen’s sales price in the United States is boosted by tariff guarantees, the importer can transfer the risk of being charged with anti-dumping duties. Give Boshen the United States, thus stabilizing operating costs. Driven by the ambiguity of the two evils, a large number of importers who originally purchased directly from China and South Korea turned to local procurement and placed orders in the United States.

Selective acceptance of customers
For reviewing the rainy day
The person in charge told reporters that the annual review of the US Department of Commerce, which will begin in November, will further consider whether the company's sales price is lower than the cost price. Therefore, although the number of customers who want to enter into contracts with the company is increasing day by day, the company's choice of customers is quite prudent. Some customers have lower quotations, which have left a profit margin for the company. However, the company's current attitude is to reject orders from these customers in order to maintain a high sales price and strive for an optimistic result for the review.

When the reporter asked about the expected results of the November review, the person in charge said: As early as 2006, the US International Trade Commission had concluded that the diamond saw blades of China and South Korea did not cause substantial damage to the US domestic industry; In 2007, the prosecution filed a supplementary complaint with the International Trade Commission through the judicial process, and the case continued. Years of tug-of-war, the company has accumulated rich experience in anti-dumping response, the company has also hired a team of lawyers including Chinese and American lawyers, in order to determine a lower anti-dumping tax rate or even zero tax rate in the review.

Attachment: Progress of anti-dumping investigation of Boshen tools
The Boss Tool disclosed that the US Court of Appeals for the Federal Circuit made an appeal on July 6 to Saint-Gobain (SAINTGOBAINABRASIVES, INC.) and EHWADIAMONDINDUSTRIALCO., LTD. for the US International Trade Court’s decision on the outcome of the anti-dumping case. Maintaining the verdict of the original verdict and supporting the US International Trade Commission's conclusion that the diamond tool companies of China and South Korea have caused damage to the US diamond saw blade manufacturing industry. So far, the proceedings against the United States International Trade Commission threatened the results of the substantive damage to the anti-dumping case.

Boshen Tools emphasized that the US litigation results against anti-dumping cases of diamond saw blades and components originating in China and South Korea will not have a major impact on the company's operations and profitability. When formulating the 2010 annual business plan, the company has fully considered the factors of the US Customs' levy of anti-dumping tariff guarantee. Therefore, the company's previously disclosed 2010 semi-annual performance forecast and 2010 annual business indicators have not changed.

On July 6, 2010, the US Court of Appeals for the Federal Circuit finally ruled that the US International Trade Commission’s conclusion that the export of diamond tools companies from China and South Korea to the United States caused damage to the diamond saw blade manufacturing industry in the United States.

In formulating the 2010 annual business plan, the company has fully considered the factors of the US Customs' levy of anti-dumping tariff guarantee. The company's 2010 semi-annual performance forecast and 2010 business indicators have not changed.

With the end of the litigation process surrounding the threat of substantial damage, Boshen Tools (002282) importers in the United States will continue to pay customs deposits for imported diamond circular saw blades and component products.

The Boshen tool is a leading enterprise in the domestic diamond tool industry, and it is also determined as a sampling company for this anti-dumping investigation because of its large export volume to the United States.

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