Russia Will Hit Chinese Bearings With Dumping Duties

Russia's state news agency is reporting that massive across-the-board antidumping duties will be imposed on all ball and roller bearings manufactured in China. The duty schedules are reportedly 31.3% for bearings produced by Wuxi Rolling Bearing, but 41.5% on ball and roller bearings from all other manufacturers. The duties will reportedly be in place for five years. Needle roller bearings will be exempt from these duties, as they do not have a conflicting Russian manufacturer.

The Ministry of Economic Development and Trade of the Russian Federation is reportedly set to announce the findings and duties, resulting from an investigation launched in late 2006. The investigation covered all bearings imported from China between 2002 and 2006.

Dumping is loosely defined as the sale of a product into a market at less than the true cost of production. Dumping is an illegal and predatory market practice; countries are quick to respond as dumping can quickly damage a domestic industry.
In early 2007, the Ministry outlined its investigation and identified the areas of primary concern. In particular, the Ministry noted it is not only concerned about the pricing of bearings coming from China, but also their low quality and high proportion of counterfeits.

Unlike other countries, Russia's METD took its investigation one step further ... tracking down so-called "identity masking," or a falsified country of origin. Identity masking is the situation where a company in China produces bearings for a client in Europe; the European company's name and trademark are etched on the bearings. But most importantly, those bearings made in China are marked with the European company's country of origin. To hide their origins, the bearings are actually shipped from China to a European warehouse and then to Russia.

Trade officials in other countries, including the United States and across the Euro zone, have been relatively lax in tracking down cases of identity masking.

Russian bearing manufacturers represented in the initial complaint are VPZ-15 Volzhsky Bearing Plant, Kursk Bearing Plant, Rostov Tenth Bearing Plant, SPZ Saratov Bearing Plant, SPZ-4 Vologda Bearing Plant, and Roltom / Tomsk Bearing SBP-5. Together, they account for the requisite 50+% of Russian domestic bearing production in order for authorities to initiate an antidumping investigation.

The MEDT claims domestic bearing production plummeted 30% between 2002 and 2005, to 70% of the domestic market, almost entirely due to bearings from China. Meanwhile, the volume of Chinese bearing imports grew sixteen-fold.

Separately, Ukraine has initiated an investigation in mid-2006 into alleged dumping of bearings from China.

The 41.5% duty rate will be in effect for five years. It will not be automatically renewed, but subject to a sunset review at that point, just as the United States does under the Uruguay Round Agreements Act.

The mechanisms for collecting the duties and/or paying deposits at the time of importation are unclear. Duties collected will go into the government's general fund.

The China Chamber of Commerce for Machinery and Equipment (CCCME) met to determine its official response, not yet revealed.

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