WASHINGTON—The U.S. Department of Commerce has levied stiff preliminary countervailing duties against imports of rubber bands from China, but found that subsidies on rubber bands from Thailand were too low to be actionable.

Commerce published its countervailing duty findings on rubber bands in the July 9 Federal Register, one week after issuing memorandums detailing its research and conclusions on Chinese and Thai rubber band imports to the U.S.

The case began in January, when Hot Springs, Ark.-based Alliance Rubber Co. filed petitionsunder Sections 701 and 731 of the Trade Act.

Imports of rubber bands from China, Thailand and Sri Lanka were being unfairly subsidized by their home governments and being sold in the U.S. at less than fair value, Alliance charged.

Alliance claimed that foreign dumping and subsidies forced the company to downsize to 176 employees as the result of selling 15 million pounds of rubber bands in 2017. This was down from 25.5 million pounds and 250 employees in 1999.

Distributors of imported rubber bands, however, claimed Alliance's loss of business was due to poor business decisions, not unfair competition from imports.

The International Trade Commission held a hearing on the Alliance petitions Feb. 20. The ITC voted March 15 to continue the antidumping and countervailing duty investigations against China and Thailand, but decided that Sri Lankan rubber band imports had a negligible effect on U.S. production.

In its preliminary countervailing duty investigation, Commerce found that all Chinese rubber band makers had dumping margins of 125.77 percent. The agency ordered U.S. Customs and Border Protection to start collecting cash deposits from Chinese rubber band importers in that amount.

"In making these findings, we relied solely on facts available because neither the government of China nor any of the selection mandatory respondent companies responded to the (subsidy) questionnaire," Commerce wrote.

In the case of Thailand, however, Commerce found only de minimis subsidies—0.23 percent against Liang Hah Heng International Rubber Co. Ltd. and 0.37 percent against U Yeng Industry Co. Ltd.
Jason Risner, Alliance director of business strategy, said his company was encouraged by Commerce's decisions.

"We took the ruling on China as a good sign that our petitions were worthwhile," Risner said. "We were a little disappointed at the decision on Thailand, but we take comfort that the countervailing duty ruling has no bearing on the antidumping ruling, so we're still hopeful on that front."

Commerce's preliminary decision on antidumping duties against China and Thailand, originally scheduled for July 10, now will not be issued until late August, Risner said.

The countervailing duty notices can be found at online at gpo.gov.