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US tariffs on Chinese chassis

The Coalition of American Chassis Manufacturers has succeeded in convincing the US Commerce Department and the US International Trade Commission (ITC) to impose tariffs on container chassis imported from China.

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The Coalition members are Cheetah Chassis Corporation, Hercules Enterprises LLC, Pitts Enterprises Inc, Pratt Industries Inc and Stoughton Trailers. On 20 July 2020, the Coalition filed petitions with the Commerce Department and ITC, alleging that US chassis manufacturing is “materially injured or threatened with material injury by reason of subsidised imports of chassis from China and less than full value imports of chassis from China”.

 

Chinese-built chassis have been subject to 10% tariffs since 2018, which were increased to 25% in 2019. However, US manufacturers claimed that these had no impact at all on the level of US production, other than to increase the number of chassis imported ahead of the tariff increase to 25% in 2019, and the price of Chinese

chassis did not rise materially – though this was disputed by chassis importers.

 

As the case made its way through the process, the ITC had to consider, among other things, whether CIMC is a state-owned company. All the different divisions of CIMC have complicated ownership structures. The tank container business, for example, is held as ‘CIMC Safe Tech’. The main shareholder of CIMC Safe Tech (90%) is Win Score Investment, which is a wholly owned subsidiary of CIMC Enric, itself owned 68.2% by the CIMC Group ‘through certain indirect subsidiaries’.

 

The ITC held that, notwithstanding this type of complicated ownership structure, CIMC is ultimately a state-owned company. The ITC found that Chinese suppliers were selling chassis in the US at less than fair market value, and assessed a dumping rate of 188.05%. “When combined with the subsidy rate Commerce previously found, the total final duty rate will be 221.37%. These duties will enable US producers to compete in a fairly traded market,” Wiley, the legal firm representing US producers, said in a statement.

 

Robert E. DeFrancesco, counsel to the Coalition and a partner at Wiley, said: “The US chassis industry was on the verge of elimination after years of unfairly traded imports, primarily from Chinese government-owned producer. If that were allowed to happen, the US would have become completely dependent on a Chinese state-owned monopolist to supply its entire chassis needs, much as it is now for its shipping containers.”

 

Chassis importers, some trucking companies and pool operators that are relying on imported chassis to help address the chassis shortage in the US said the decision will make the current situation worse. US producers need time to ramp up production, but they are moving to seize the opportunity. Stoughton trailers said it is hiring “hundreds of assemblers, welders and supervisors” at its plant in Evansville, WI.

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