US sets preliminary 72% tariff on Electrolux Mexico-made washing machines

US sets preliminary 72% tariff on Electrolux Mexico-made washing machines

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Electrolux Major Appliances North America announced it has been informed by the U.S. Department of Commerce (DOC) that a preliminary and significantly increased tariff rate of 72.41% on washing machines manufactured in Mexico and imported into the U.S. between February 2016 and January 2017 was set.

The company said it intends to “contest this decision vigorously”. If the preliminary tariff rate is determined as final, it could have a one-time cost to Electrolux of up to US$ 70 million in 2018. "We believe this is completely unfounded and look forward to exposing the facts in court," said in a statement Alan Shaw, Head of Electrolux Major Appliances North America.

Following an antidumping order and tariff rate imposed by the DOC in 2012, Electrolux has each year since requested a review of the rate in arrears based on actual data submitted by Electrolux and others for the period. Each review by the DOC determines the tariff to be imposed on the affected products. 

The most recent rate determined by the DOC, on the basis of actual data submitted, was 3.67% for the third period of review - February 2015 to January 2016. This indicated, as in previous periods, that any "dumping" as defined by the DOC standards has been minimal.

In the fourth period of review, the DOC did not accept Electrolux's submission of actual data and has determined the tariff rate without regard to actual data. This preliminary tariff rate is significantly higher than it would have been if the DOC had considered actual data for the period.

“It is Electrolux's position that the DOC set this preliminary tariff rate by improperly citing, as the basis for this decision, a failure on behalf of Electrolux to submit the data in a timely manner,” said the company.

Electrolux noted it has been advised that the DOC's decision in this regard lacks legal merit, because the DOC failed to provide Electrolux actual notice of the relevant documents or the necessary timeframe for response, as required by the World Trade Organization Anti-Dumping Agreement and the DOC's own internal guidelines.

A decision on the final established rate is expected to be issued by March 1, 2018. Electrolux intends to contest any decision not based on actual data and, if necessary, to submit an appeal.