Commerce Finds End Use Removes Exercise Equipment Part From Stainless Steel Sheet Duties
End uses and channels of trade matter for determining whether processing removes a product from the scope of antidumping and countervailing duties on stainless steel sheet and strip from China (A-570-042/C-570-043), according to a Commerce Department scope ruling issued Nov. 24. The agency found that the flywheel housings imported by Concept2 for use in its exercise machines are not covered by the AD/CVD orders, despite sharing the same physical characteristics as the subject merchandise.
The scope ruling marks an apparent change from another ruling issued by Commerce two years ago on trash can lids (see 1812050009). In that November 2018 scope ruling, the agency found the lids met the physical requirements of the scope, and that the further processing to turn them from steel sheet into trash can lids did not remove them from scope coverage.
This time, Concept2 argued that the perforated housings, which are components for its rowing machines, are not considered “flat-rolled products” for commercial purposes, as is required for inclusion under the scope of AD/CV duties on stainless steel sheet and strip. Commerce did not disagree, but noted there is no definition of “flat-rolled product” in the scope of the AD/CVD orders. It determined to conduct its five-factor “Diversified Products” test to decide whether the flywheel housings would be covered by AD/CV duties.
Commerce did find that the flywheel housings are physically part of the same class or kind of merchandise subject to the AD/CVD orders on stainless steel sheet and strip from China. While the stainless steel sheet used in the flywheel housings has been perforated, the scope of the AD/CVD orders says “subject merchandise may be further processed including 'punched' so long as it maintains the specific dimensions referenced in the scope,” Commerce said.
On the other hand, the ultimate use, consumer expectations and channels of trade of the flywheel housings are not the same as for stainless steel sheet and strip, Commerce said. Precisely designed, manufactured, sized and fitted for Concept2’s rowing machine, the housings cannot be used as an input in a variety of consumer and industrial applications, such as automotive parts, pipe and tube, food service equipment, kitchen equipment and appliances, and tanks and pressure vessels. Nor can a piece of stainless steel sheet and strip covered by the AD/CVD orders be used as a flywheel housing “without significant processing,” Commerce said.
Ultimate purchasers of the flywheel housings would also not see them as interchangeable with stainless steel sheet and strip covered by the AD/CVD orders. “Customers who purchase this product, unlike those who purchase subject [stainless steel sheet and strip], would not expect to use it as an input material for production in other consumer and industrial applications,” Commerce said. And the flywheel housings are not advertised or displayed as anything other than a replacement part for exercise equipment, Commerce said.
Email ITTNews@warren-news.com for a copy of this scope ruling.