by Jacques Gordon
Last fall the U.S. International Trade Commission (ITC) was asked by the U.S. arm of Mexichem to open an investigation into allegations of refrigerant dumping by manufacturers in China. This spring the ITC commissioners voted to open a formal “anti-dumping and countervailing duties investigation.” If the commissioners determine that “subsidies are being provided to producers and exporters of 1,1,1,2-Tetrafluoroethane (refrigerant) from the People’s Republic of China” as alleged in the request for investigation, this clears the way for the federal government to impose a tax on refrigerant imported from China.
Dumping refers to the practice of selling a product in a foreign market below its own home-market price, often even below its actual production cost. While not specifically prohibited, dumping is a predatory (and usually damaging) market practice that is used to drive producers out of their own local market. Governments typically defend their home market by imposing a tax on the imported product to bring it up to the same home-market price. However there is a risk of retaliation by the foreign government imposing import duties against the defenders products.
The ITC has already developed an import duty schedule that taxes products from specific companies in China according to their export price, ranging from a low of 1.35 percent to a high of almost 29 percent. If the commissioners determine that U.S. refrigerant producers are being “materially injured” by imports of underpriced refrigerant from China, these duties will be imposed no later than August 4th of this year (unless postponed by some other government action).
We can expect the price of refrigerant to increase sometime this summer. Although several counterfeiters have recently been put out of business, there may still be a greater risk of counterfeit refrigerant containers being imported to the U.S. that contain something other than pure R-134a. To avoid being stuck with unusable refrigerant, buy name-brand products from known sources and test the refrigerant with an identifier before taking delivery.
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When having your mobile A/C system professionally serviced, insist on proper repair procedures and quality replacement parts. Insist on recovery and recycling so that refrigerant can be reused and not released into the atmosphere.
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The 35th annual Mobile Air Conditioning Society (MACS) Worldwide Training Conference and Trade Show, Meet me at MACS! will take place February 5-7, 2015 at the Caribe Royale Hotel and Convention Center.