John Wolz

The “Importer of Record” could face retroactive antidumping duties on nails, Mona Zinman, co-CEO of PrimeSource Building Products, told the 32nd annual convention of the Specialty Tools & Fasteners Distributions Association.
The current dumping duty investigation on nails began in May 2007, in response to a U.S. nail industry petition claiming unfair competition from China and Dubai, and ended this past July. Two government agencies spent more than a year accumulating nail import data.
The International Trade Commission made a preliminary determination of injury, followed by the Department of Commerce, which determined nails were being dumped from 21.24% to 118% below market. The ITC then reaffirmed by a unanimous vote that the U.S. nail industry had been materially injured.
But the chilling scenario to Zinman is the word “retroactive.”
“In business and in life we can react to any disaster or any problem as long as we know what we are dealing with,” Zinman said in her STAFDA Associate State of the Industry address. If business weakens “we do a budget and forecast to adjust future spending.”
Preliminary DOC results for nail imports will be available by the middle of 2010. Final results could come as late as 2011 for the period of January 2008 through July 2009.
“In 2011 we will learn the final duty rate on entries made as far back as three years earlier and that dumping duty rate may very well change,” Zinman explained. The rate will be applied retroactively and the process continues for at least five years.
If the rate goes from 21% to 31%, the “importer of record” will get a bill for the 10%. The nails will already have been sold and in a roof or drywall or deck and the added cost can’t be passed on, Zinman noted.
Zinman travels the world sourcing products. PrimeSource supplies GripRite nails, screws and tools, as well as rebar, roofing, insulation, drywall and related products. PrimeSource has 1,000 employees in 38 North American locations.
Zinman noted that nails are manufactured today exactly the way they were a century ago, but they’re crucial to the construction industry.
“You think low-tech. You think of a piece of steel with a point and a head and you think & boring,” she acknowledged. “But despite the unassuming boring nature of the nail it has a colorful history and has been a source of constant attention and focus by our government.”
Zinman explained that “crying to the government for help is an old strategy which has been used by U.S. nail mills over and over again for more than 30 years to try to block competition from imports.” She cited 10 cases from 1977 through 2001 involving Canada, South Korea, Japan, Yugoslavia, Poland, New Zealand, Thailand and Malaysia.
“And now our industry is living with the results of the latest one,” Zinman said. “With only five U.S. nail mills left once again the claim of ‘foul’ against imports and once again the government decision which virtually was never in doubt since as we know history repeats, and after all, politics is politics.”
The result of the 2008 investigation is that certain nails from China went up 21% and the U.S. government is collecting a 21% tax, while the cost to consumers is rising.
With PrimeSource as the importer of record, “we are standing on the firing line taking the bullets taking the risk. Whether it is China today or Indonesia tomorrow whether it’s dumping duty today or countervailing duty tomorrow.”
“Just as our industry has experienced the best of times, we are now struggling through difficult days,” Zinman said. “But this too shall pass and although its too late to believe in fairytale promises that nothing bad will ever happen it is never too late to believe in the future and the successes still to come for all of us.” �2008 FastenerNews.com