U.S. Commerce Department imposes 22.52 percent duty on Japanese engine manufacturers in ‘dumping' case
by Mercury Marine
08/06/2004

FOND DU LAC, Wis. (Aug. 6, 2004) – The U.S. Department of Commerce (DOC) announced today it 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. 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.”

United States law authorizes the imposition of duties to offset injurious dumping, which occurs when a foreign producer sells products in the United States at prices significantly less than in its own country and causes injury to a U.S. industry. U.S. anti-dumping laws are intended to prevent foreign industries from using such pricing practices to harm American competitors by selling products in the U.S. at prices below “fair value.”

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.

Mercury Marine is a division of Brunswick Corporation, which is based in Lake Forest , Ill.

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