The Coalition of American Vertical Engine Producers, on behalf of Kohler Co. and Briggs & Stratton Corporation (collectively “petitioners”), on the beginning of this year, filed antidumping (AD) and countervailing duty (CVD) petitions on imports of vertical shaft engines between 225cc and 999cc and parts thereof from China. For the purpose of AD investigations, dumping occurs when a foreign company sells a product in the United States at less than its fair value.
For the purpose of CVD investigations, a countervailable subsidy is financial assistance from a foreign government that benefits the production of goods from foreign companies and is limited to specific enterprises or industries or is contingent either upon export performance or upon the use of domestic goods over imported goods. The Chinese engines in question are primarily used in the consumer lawn & garden and commercial turf industries, both of which are critical markets for the U.S. engine builders. The Chinese engines enter the domestic market as loose engines sold to manufacturers, as well as in equipment sold in the U.S. market.
The subject lawnmowers are typically classified under subheadings 8433.11.0050 of the Harmonized Tariff Schedule of the United States (HTSUS) and may also enter under subheadings 8433.90.1010, 8433.90.1090, and 8407.90.1010. Specifically excluded from the scope of the petition are electric-powered walk-behind mowers, which are typically classified under HTSUS subheading 8433.11.0010. Subject merchandise includes certain small vertical shaft engines produced in the subject country whether mounted on outdoor power equipment in the subject country or in a third country. Subject engines are covered whether or not they are accompanied by other parts.
The merchandise covered by this investigation consists of spark-ignited, non-road, vertical shaft engines, whether finished or unfinished, whether assembled or unassembled, designed primarily for use in riding lawn mowers and zero-turn radius lawnmowers. Engines meeting this physical description may also be designed for use in other non-hand-held outdoor power equipment.
Alleged Dumping Margins
Petitioner estimates dumping margins of 517.82 percent, 466.02 percent, 548.74 percent, and 491.81 percent on small vertical engines from China.
Foreign producers and US importers of lawnmowers from the PRC and Vietnam
The petition identifies 46 exporters and 60 US importers of lawnmowers from the PRC and two exporters and three US importers of lawnmowers from Vietnam.
Because China is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from China materially injure, or threaten material injury to, a U.S. industry. As the DOC considers China to be a non-market economy, petitioner calculated the estimated dumping margin based on values and costs in a surrogate country: Turkey. Based on these calculations, petitioner alleges dumping margins ranging from 320.41% to 539.45%.
For purposes of this investigation, an unfinished engine covers at a minimum a sub-assembly comprised of, but not limited to, the following components: crankcase, crankshaft, camshaft, piston(s), and connecting rod(s). The Commission’s public report Small Vertical Shaft Engines from China (Inv. Nos. 701-TA-643 and 731-TA-1493 (Preliminary), USITC Publication 5054, May 2020) will contain the views of the Commission and information developed during the investigations. The report will be available after June 1, 2020.