The U.S. Department of Commerce had promising news, Tuesday, for a partnership of U.S. golf cart makers seeking to curb the impact of alleged dumping practices by their industry counterparts in China.
Club Car, headquartered in Augusta, and Textron Inc., whose companies E-Z-GO and Cushman Vehicles are also based locally, comprise the American Transportation Vehicles Coalition. On June 20, on behalf of the American low-speed personal transportation vehicle (LSPTV) industry, the coalition filed an antidumping and countervailing duty petition to the Department of Commerce against Chinese LSPTV manufacturers.
Dumping is a predatory economic practice in which a producer exports its product at a lower price than normal, adversely affecting the industry in the exported country. A countervailing duty (CVD) is an import tax imposed by an importing country to mitigate the injurious effects of trade subsidies.
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Club Car and Textron contended that LSPTVs imported from China sold at substantially lower rates than their American equivalents due to substantial subsidies on LSPTVs by the Chinese government, causing material injury to the U.S. transportation vehicle market.
On July 10, in response to the petitions, the Dept. of Commerce commenced a less-than-fair value investigation on LSPTV imports from the People’s Republic of China.
On Tuesday, Commerce announced the preliminary findings of its CVD investigation that China’s subsidies on its LSPTV industry are injurious to vehicle manufacturers in the states. As a result, it will be imposing countervailing duties of 21.23% to 515.37% on Chinese imports of low-speed transport vehicles.
“We’re glad to see the U.S. Department of Commerce take a stand for American manufacturers and workers,” said Club Car CEO Mark Wagner on Commerce’s announcement, Tuesday. “The decision today is a first step in the right direction to restore a fair marketplace for the American LSPTV industry and to help us and our hardworking employees recover from the unfair trade practices of the state-backed Chinese producers.”
China imported more than 57,000 LSPTVs to the U.S. in 2021, a value of over $168 million. Both these numbers increased over the next two years, so that in 2023, Chinese manufacturers and sold nearly $500 million worth of products in the states.
On Nov. 21, Secretary of Commerce Gina Raimondo received a letter from members of Congress in support of the coalition and the American LSPTV industry, commending the department on its investigation. Congressmen Rick Allen and Barry Loudermilk, Sens. Jon Ossoff and Raphael Warnock of Georgia, as well as Sen. Lindsey Graham and Congressman Joe Wilson of South Carolina were among the signers.
Robert DeFrancesco, partner with the renowned D.C. law firm Wiley Rein and counsel for the coalition, stressed in a press release about Commerce’s announcement that its findings are only preliminary, the investigation is still ongoing and subsidies could still increase before the Dept. of Commerce releases its final determination, slated for April of next year.
President-elect Donald Trump has pledged to impose a 10% tax imports from China as soon as he’s inaugurated, alongside tariffs on Canadian and Mexican imports. How this may affect the LSPTV industry amid China’s subsidized imports remains to be seen, but DeFrancesco indicates that vehicle manufacturers are being cautious.
“While the coalition is hopeful that the incoming Trump administration will help to address the unfair trade taking place, it is not clear yet what the nature of those tariffs will be,” said DeFrancesco. “The current 301 tariffs that are in place have not fully addressed the significant amounts of unfair trade taking place.”
Skyler Andrews is a reporter covering business for The Augusta Press. Reach him at skyler@theaugustapress.com.
