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Commerce Department to investigate rubber band imports

Rubber band imports are the latest consumer product to come under investigation by the Trump administration for alleged antidumping and countervailing duty violations.

Commerce Secretary Wilbur Ross said Feb. 22 that his office has initiated separate investigations on rubber bands imported from Thailand, China and Sri Lanka, following a petition by an American rubber band producer, according to a news release.

The investigations include both an antidumping duty investigation, which will focus on whether Chinese, Sri Lankan and/or Thai companies are importing and selling a product in the U.S. at less than fair market value, and a countervailing duty investigation, which will focus on whether companies from the three countries are receiving government subsidies.

Both investigations were sparked by petitions filed on Jan. 30 by Hot Springs, Ark.-based producer Alliance Rubber Co., which alleged that competitors from the three Asian countries were dumping below fair market value, with an alleged margin of 27.27% below market value for rubber bands imported from China; a margin between 56.54% and 133.13% on those imported from Sri Lanka; and a margin between 28.92% and 78.36% on those imported from Thailand.

Alliance alleged in a second petition that the Sri Lankan government operates 20 subsidy programs that aid their domestic rubber band producers, while China has 16 such programs and Thailand has 10. The products covered under the investigations are vulcanized rubber bands with a flat length and certain size prerequisite.

"The department will act swiftly, while ensuring a full and fair assessment of the fact," Ross said. "The Trump administration is committed to the enforcement of America's trade laws that ensure U.S. businesses and workers have a fair chance to compete."

According to the U.S. Commerce Department, imports of rubber bands from Thailand in 2017 were valued at $12.1 million, followed by those imported from China at $4.9 million and imports from Sri Lanka at $2 million.

The U.S. International Trade Commission, or ITC, will make its preliminary determinations for both investigations on or before March 16, and the Commerce Department will issue its preliminary determinations in the countervailing duty investigation by April 26 and its antidumping duty investigation by July 10.

Final orders will be made by Aug. 31 for the countervailing duty investigation and by Nov. 14 for the antidumping duty investigation.

Should the Commerce Department and the ITC find merit in the allegations, the Trump administration can then impose tariffs on imports of rubber bands from the three countries listed.

The rubber band case marks the latest product that the Commerce Department has investigated. In January, President Donald Trump approved tariffs of up to 50% on certain large residential washer imports following a petition filed by Whirlpool Corp. citing dumping in the U.S. by South Korean producers LG Electronics Inc. and Samsung Electronics Co. Ltd. Trump also imposed tariffs of up to 30% on solar panel imports.

Trump is also weighing whether to impose tariffs on steel and aluminum imports following a Commerce Department recommendation to impose such tariffs, citing national security concerns.

According to the Commerce Department, the Trump administration has initiated 102 countervailing duty and antidumping investigations since Trump came into office.