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Member
Posts: 2393
Location: Waukesha Wisconsin | From the Milwaukee Journal Sentinel
Wednesday, December 29, 2004
Mercury wins decision in trade dispute
Japanese competitors face tariffs for selling engines too cheaply
By RICK BARRETT
[email protected]
Posted: Dec. 28, 2004
Mercury Marine Inc. won a major decision in an international trade dispute that could spare it from paying tariffs on products imported from Japan, while slapping a tariff on the Fond du Lac company’s Japanese competitors.
The decision, announced Tuesday by the U.S. Department of Commerce, could result in a nearly 19% import duty on popular Japanese-made outboards from companies such as Honda, Yamaha and Suzuki.
Whether the duty would result in higher outboard engine prices for consumers remains to be seen. But it could help Mercury remain competitive as the last American-owned outboard engine company.
“We are extremely satisfied with the decision,” said Steve Fleming, Mercury spokesman.
Earlier this year, Mercury asked the government to levy an import duty, which is a tax, on Japanese-made outboards. Mercury alleged that its Japanese competitors had engaged in predatory business practices by selling engines in the United States at prices well below what they sell for in Japan.
The practice, called “dumping,” would be a violation of international trade laws, and the allegations are under investigation by federal officials.
In August, the government proposed a 22% duty on Japanese-made outboards. That was reduced to 18.98%, Commerce officials announced Tuesday, which is still a significant victory for Mercury.
As part of the decision, Mercury officials said, the company would not have to pay the duty on unassembled engines it imports from Yamaha Motor Co. in Japan. Those products, called powerheads, are a major part of Mercury’s engine lineup.
“This is a pretty big win,” Fleming said, about having powerheads excluded from the proposed duty.
Department of Commerce officials didn’t offer much explanation for Tuesday’s announcement. “The Department found that Japanese producers/exporters have sold outboard engines in the U.S. market at less than fair value, with a margin of 18.98%,” was all they said in a written statement.
‘Still too high’
The proposed duty could be tossed out when another government agency, the U.S. International Trade Commission, rules on the trade dispute in late January. The commission’s task is to determine whether Mercury has been harmed by Japanese trading practices. If so, the duties could go forward. If not, the money collected so far in import bonds and cash deposits would be returned to the companies that paid it. “The ultimate test will be before the International Trade Commission,” said Irwin Jacobs, president of Genmar Holdings Inc., a Minneapolis boat builder that has sided with Yamaha in the dispute.
Yamaha was glad to hear that the alleged dumping margin was lowered to 18.9% from 22.5%, but it’s still too high, said Russell Jura, general counsel for Yamaha Motor Corp. USA, based in Cypress, Calif.
“Had the Department of Commerce calculated the margins correctly, the margins would have been zero,” he said. “Yamaha feels that the Department’s method of calculating these margins has fundamental flaws and does not meet the standards of the World Trade Organization.”
No final dumping duties will be imposed until the government’s investigation is complete, according to Jura. Meanwhile, Yamaha and Mercury are fighting on several legal fronts, including the dumping complaint and a dispute over the price that Mercury pays for powerheads it buys from Yamaha.
Package deals
The trade dispute is important to boat builders that buy tens of thousands of outboard engines. Ultimately, the dispute could affect the cost of boating. Some of the biggest outboard engines cost more than $10,000, and an import duty could raise prices significantly. But consumers shopping at this winter’s boat shows should not worry too much, said Charles Plueddeman, editor of Boating Magazine.
That’s because most outboard engines, especially the larger ones, are sold as part of package deals that include a boat and additional items such as a trailer. “Most people don’t see the true retail cost of the engine,” Plueddeman said.
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Member
Posts: 794
Location: Elgin, Illinois | I just read and reread this quote: " Ultimately, the dispute could affect the cost of boating. Some of the biggest outboard engines cost more than $10,000, and an import duty could raise prices significantly. But consumers shopping at this winter’s boat shows should not worry too much, said Charles Plueddeman, editor of Boating Magazine.
That’s because most outboard engines, especially the larger ones, are sold as part of package deals that include a boat and additional items such as a trailer. “Most people don’t see the true retail cost of the engine,” Plueddeman said. "
"Consumers should not worry too much... Most people don't see the true retail cost of the engine"... What, a higher engine price isn't going to be transferred into a higher package price... This guy is smoking some very starnge stuff
Edited by hgmeyer 12/29/2004 11:22 AM
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| Seems like the "tax" on assembled engines and none on the powerheads would help support American jobs, in Fon du lac and I'm all for that. If the other companies want to assemble engines here then they could save the tax also it would seem. I wonder if 18.98% is enough $$ to assemble the motors here. On a $14,000 motor that's $2,657.20 and still almost $800 on a $4,000 motor. Also Mr. Plueddeman's comments sure seem out of place. Yes, the consumer might not see the "retail" price of a motor as if buying one off the rack but there has to be an increase, sure enough the boat builders aren't going ot eat it. | |
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| hey hgmeyer..
That Pluddeman guy was either misquoted or should really be named "Stupidman".
What is true is that engines already sitting in dealers' inventories and boat builders' inventories won't be effected, as they have already been purchased at the pre-tarriff prices.
But when the tarriff kicks in -- it will be pretty doggone hard to hide a 20% increase in cost, no matter how you package it.
Translation: "BUY NOW....boyz"! | |
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Member
Posts: 714
| T-Mac - 12/29/2004 1:42 PM
Translation: "BUY NOW....boyz"!
Soooooo, T-Mac, Whats the special in the Sunday paper going to say this week? LOL !!!   | |
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| Sunday paper will say: "SALE SALE SALE".... and "VIKINGS LOSE ANOTHER CLOSE ONE"..........Same as always , Jack...LOL!
I sell both brands, and am simply an interested by-stander, like anybody else.
But,....... in all honesty... prices will go up as dealers start replacing current inventory with stuff ordered at new pricing. You will get better deals now than later in the year. | |
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Mercury wins decision in trade dispute