DOC Levels 22.52% Duty on Japanese Engines

Friday, August 06, 2004
The U.S. Department of Commerce (DOC) has issued a preliminary determination of "dumping" by Japanese outboard engine manufacturers, and has ordered a 22.52 percent import bond be posted for each Japanese engine brought into the United States, according to a press release being distributed by Mercury Marine. The DOC's ruling follows an investigation launched earlier this year after U.S.-based Mercury Marine filed a petition with the DOC and the U.S. International Trade Commission (ITC).

"We are pleased the Commerce Department's investigation has confirmed Mercury's contention that Japanese outboard engine makers have been violating U.S. anti-dumping laws by engaging in unfair pricing practices during the past several years. We believe these actions have significantly harmed the domestic outboard engine industry," said Patrick C. Mackey, president of Mercury Marine.

"This was not an action undertaken lightly," Mackey continued. "Even though engines Mercury imports from Japan will be subject to the duty, we believed it was our responsibility - to our shareholders, our employees and the U.S. marine engine industry - to follow this course. What we seek is a level playing field upon which all outboard engine manufacturers sell at 'fair value,' competing solely on the basis of their products' features, appeal, price and value. As other industries have seen, by deliberately undercutting pricing to create an artificial advantage in the marketplace, these Japanese companies did not follow U.S. law. Our hope is that these findings will ensure that everyone competes on an equal footing in the marketplace going forward."

During the ITC's preliminary investigation, Mercury Marine presented evidence that Japanese underselling had resulted in rapidly increasing market share by those companies, and that American companies had been materially harmed. Additional evidence illustrated that Japanese underselling had suppressed domestic prices, and that price undercutting by Japanese engine companies had been especially aggressive with large boat builders and boat dealers, who account for a significant portion of engine sales.

The DOC's order will take effect upon its filing and publication in the Federal Register, which is expected to take place in about a week. The DOC will make a final determination on the duties imposed in the coming months. After that, the ITC will announce its final findings regarding the extent to which illegal pricing practices by Japanese companies have harmed Mercury and other companies that manufacture outboard engines in the U.S.

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