On Friday, September 22, U.S. Customs and Border Protection (CBP) announced interim measures in a consolidated investigation under the Enforce and Protect Act of 2015 (EAPA), against U.S. importers of Chinese sawblades Power Tek Tool, Inc. (Power Tek) and Lyke Industrial Tool, LLC (Lyke). CBP has a “reasonable suspicion” that Power Tek and Lyke are evading the antidumping duty order on Diamond Sawblades from China by falsely classifying imports of Chinese sawblades to the United States as millstone products, which are not subject to any antidumping duty order. Wiley Rein represents the Diamond Sawblades Manufacturers’ Coalition (DSMC), an ad hoc coalition of U.S. manufacturers that submitted the allegations that led to this consolidated investigation.
On July 18, 2017, CBP initiated the two investigations that have now been consolidated, based on evidence submitted by DSMC that Lyke, a successor to Power Tek, had strangely stopped importing diamond sawblades and began importing “millstone diamond saw segments” when the dumping margin on sawblades increased from 2.34% to 29.76%. Among other evidence, CBP also considered that Lyke’s U.S. customer of the new “millstone segments” was a reseller of only fully assembled sawblades and had no ability to manufacture diamond sawblades from these supposed segments.
In addition, following initiation of the investigations, CBP conducted a cargo exam of an entry by Power Tek and discovered diamond sawblades that had been misclassified in the entry documentation as millstone product. In light of this and DSMC’s allegations, CBP has now imposed interim measures that include, but are not limited to:
- Requiring that misclassified entries be rated-adjusted to reflect that they are indeed subject to the antidumping order;
- Requiring that entries be made as “live entries,” meaning that entry documents and duties are required before the merchandise is released into the U.S. market; and
- Suspending liquidation on entries dated on or after the July 18, 2017 initiation.
Like the recent investigation against Diamond Tools Technology (DTT), this consolidated investigation and its corresponding interim measures are a significant development for the U.S. diamond sawblades industry.