U.S. International Trade Commission

Publication 4449 January 2014

Washington, DC 20436

Raw Flexible Magnets 

from China and Taiwan

Investigation Nos. 701-TA-452 and 731-TA-1129-1130 (Review)
U.S. International Trade Commission

COMMISSIONERS 

 

Irving A. Williamson, Chairman 

Shara L. Aranoff 

Dean A. Pinkert 

David S. Johanson 

Meredith M. Broadbent 

F. Scott Kieff

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Director of Operations

Michael Szustakowski, Investigator 

Sharon Ford, Industry Analyst 

Nataline Viray-Fung, Attorney 

Elizabeth Haines, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4449 January 2014

Raw Flexible Magnets 

from China and Taiwan

Investigation Nos. 701-TA-452 and 731-TA-1129-1130 (Review)

  

CONTENTS

Page

i

Determination ......................................................................................................................... 1

Views of the Commission......................................................................................................... 3

Information obtained in the review....................................................................................... I‐1

Introduction............................................................................................................................... I‐1

Background............................................................................................................................ I‐1

The original investigations..................................................................................................... I‐2

Commerce’s reviews ............................................................................................................. I‐3

The product............................................................................................................................... I‐4

Commerce’s scope ................................................................................................................ I‐4

U.S. tariff treatment .............................................................................................................. I‐5

Domestic like product and domestic industry ...................................................................... I‐5

Description and uses ............................................................................................................. I‐6

Production process................................................................................................................ I‐7

Interchangeability and customer and producer perceptions............................................... I‐8

Channels of distribution ...................................................................................................... I‐10

Pricing and related information .......................................................................................... I‐10

The industry in the United States ........................................................................................... I‐11

U.S. producers..................................................................................................................... I‐11

U.S. producers’ trade and financial data............................................................................. I‐12

U.S. imports and apparent consumption................................................................................ I‐13

U.S. importers...................................................................................................................... I‐13

U.S. imports......................................................................................................................... I‐14

Ratio of imports to U.S. production .................................................................................... I‐14

Apparent U.S. consumption and market shares................................................................. I‐15

The industry in China............................................................................................................... I‐15

Background.......................................................................................................................... I‐15

Capacity and production ..................................................................................................... I‐16
  

CONTENTS

Page

ii

The industry in Taiwan ............................................................................................................ I‐16

Background.......................................................................................................................... I‐16

Capacity and production ..................................................................................................... I‐16

Trade remedy measures in third‐country markets............................................................. I‐17

Note.—Information that would reveal confidential operations of individual concerns may not

be published and therefore has been deleted.  Such deletions are indicated by asterisks.
UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Review)

Raw Flexible Magnets from China and Taiwan

DETERMINATION

On the basis of the record1 developed in the subject five‐year reviews, the United

States International Trade Commission (Commission) determines, pursuant to section 751(c) of

the Tariff Act of 1930 (19 U.S.C. ' 1675(c)), that revocation of the countervailing duty order on

raw flexible magnets from China and the antidumping duty orders on raw flexible magnets from

China and Taiwan would be likely to lead to continuation or recurrence of material injury to an

industry in the United States within a reasonably foreseeable time.

BACKGROUND

The Commission instituted these reviews on August 1, 2013 (78 F.R. 46604) and

determined on November 20, 2013 that it would conduct expedited reviews (78 F.R. 73561,

December 6, 2013).

 1 The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19

CFR ' 207.2(f)).

3

Views of the Commission

Based on the record in these five‐year reviews, we determine under section 751(c) of

the Tariff Act of 1930, as amended (“the Tariff Act”), that revocation of the countervailing duty

order on raw flexible magnets from China and the antidumping duty orders on raw flexible

magnets from China and Taiwan would likely lead to continuation or recurrence of material

injury to an industry in the United States within a reasonably foreseeable time.  

I. Background

Original Investigations.  The original investigations of raw flexible magnets from China

and Taiwan were instituted in response to a petition that Magnum Magnetics Corp.

(“Magnum”) filed on September 21, 2007.1

  In July 2008, the Commission determined that an

industry in the United States was threatened with material injury by reason of imports of raw

flexible magnets from China that the U.S. Department of Commerce (“Commerce”) found had

been subsidized and by reason of imports of raw flexible magnets from China and Taiwan that

Commerce found had been sold at less than fair value.2

  Commerce issued antidumping duty

and countervailing duty orders on subject imports on September 17, 2008.3

Current Reviews.  The Commission instituted these reviews on August 1, 2013.4  The

Commission received one substantive joint response to the notice of institution from Magnum

and ***, domestic producers of raw flexible magnets.5

  It did not receive a response from any

respondent interested party.  On November 20, 2013, the Commission found the domestic

producers’ response to the notice of institution individually adequate, the domestic interested

party group response adequate, and the respondent interested party group responses

inadequate.6

  The Commission did not find any circumstances that would warrant conducting

full reviews and determined that it would conduct expedited reviews pursuant to section

751(c)(3) of the Tariff Act.7

     

                                                      

1 Confidential Report (“CR”) at I‐3, Public Report (“PR”) at I‐2. 2 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452, 731‐TA‐1129, and 731‐TA‐

1130 (Final), USITC Pub. 4030 at 3 (August 2008) (“Original Determinations”).    3 Raw Flexible Magnets from China, 73 Fed. Reg. 53847 (Sept. 17, 2008) (notice of antidumping

duty order); Raw Flexible Magnets from Taiwan, 73 Fed. Reg. 53848 (Sept. 17, 2008) (notice of

antidumping duty order); Raw Flexible Magnets from China, 73 Fed. Reg. 53849 (Sept. 17, 2008) (notice

of countervailing duty order). 4 Raw Flexible Magnets from China and Taiwan, 78 Fed. Reg. 46604 (Aug. 1, 2013) (institution of

five‐year reviews).

5 Substantive Response to the Commission’s Notice of Institution, Sept. 3, 2013 (“Response”).    6 Summary Voting Sheet, INV‐13‐114, EDIS Doc. 524276. 7 See Explanation of Commission Determination on Adequacy (Nov. 29, 2013).  
4

II. Domestic Like Product and Industry

A. Domestic Like Product

In making its determination under section 751(c) of the Tariff Act, the Commission

defines the “domestic like product” and the “industry.”8

  The Tariff Act defines “domestic like

product” as “a product which is like, or in the absence of like, most similar in characteristics and

uses with, the article subject to an investigation under this subtitle.”9  The Commission’s

practice in five‐year reviews is to examine the domestic like product definition from the original

investigation and consider whether the record indicates any reason to revisit the prior

findings.10  

Commerce has defined the imported merchandise within the scope of the orders under

review as follows:

The products covered by this order are certain flexible magnets

regardless of shape, color, or packaging. Subject flexible magnets are

bonded magnets composed (not necessarily exclusively) of (i) any one or

combination of various flexible binders (such as polymers or co–

polymers, or rubber) and (ii) a magnetic element, which may consist of a

ferrite permanent magnet material (commonly, strontium or barium

ferrite, or a combination of the two), a metal alloy (such as NdFeB or

Alnico), any combination of the foregoing with each other or any other

material, or any other material capable of being permanently

magnetized.    Subject flexible magnets may be in either magnetized or

unmagnetized (including demagnetized) condition, and may or may not

be fully or partially laminated or fully or partially bonded with paper,

plastic, or other material, of any composition and/or color. Subject

flexible magnets may be uncoated or may be coated with an adhesive or

any other coating or combination of coatings.  Specifically excluded from

the scope of this order are printed flexible magnets, defined as flexible

magnets (including individual magnets) that are laminated or bonded

with paper, plastic, or other material if such paper, plastic, or other

                                                      

8 19 U.S.C. § 1677(4)(A).

9 19 U.S.C. § 1677(10); see, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007);

NEC Corp. v. Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp.

v. United States, 19 CIT 450, 455 (1995); Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

Trade 1996); Torrington Co. v. United States, 747 F. Supp. 744, 748‐49 (Ct. Int’l Trade 1990), aff’d, 938

F.2d 1278 (Fed. Cir. 1991); see also S. Rep. No. 249, 96th Cong., 1st Sess. 90‐91 (1979).

10 See, e.g., Internal Combustion Industrial Forklift Trucks from Japan, Inv. No. 731‐TA‐377

(Second Review), USITC Pub. 3831 at 8‐9 (Dec. 2005); Crawfish Tail Meat from China, Inv. No. 731‐TA‐

752 (Review), USITC Pub. 3614 at 4 (July 2003); Steel Concrete Reinforcing Bar from Turkey, Inv. No. 731‐

TA‐745 (Review), USITC Pub. 3577 at 4 (Feb. 2003).
5

material bears printed text and/or images, including but not limited to

business cards, calendars, poetry, sports event schedules, business

promotions, decorative motifs, and the like. This exclusion does not apply

to such printed flexible magnets if the printing concerned consists of only

the following: A trade mark or trade name; country of origin; border,

stripes, or lines; any printing that is removed in the course of cutting

and/or printing magnets for retail sale or other disposition from the

flexible magnet; manufacturing or use instructions (i.e., ‘‘print this side

up,’’ ‘‘this side up,’’ ‘‘laminate here’’); printing on adhesive backing (that

is, material to be removed in order to expose adhesive for use such as

application of laminate) or on any other covering that is removed from

the flexible magnet prior or subsequent to final printing and before use;

non‐permanent printing (that is, printing in a medium that facilitates easy

removal, permitting the flexible magnet to be reprinted); printing on the

back (magnetic) side; or any combination of the above. All products

meeting the physical description of subject merchandise that are not

specifically excluded are within the scope of this order.11

The scope definition set out above is unchanged from Commerce’s scope definition in

the original investigations.  Raw flexible magnets are magnets that can be twisted, bent, coiled,

or otherwise molded into any shape without loss of magnetic properties.12  Raw flexible magnet

shapes are typically used in the production of commercial goods for purposes such as

refrigerator door gaskets, shower doors, and merchandise exhibits.13  Raw flexible magnets also

are manufactured in sheet and strip form for use in the production of refrigerator magnets,

magnetic signs and labels, and magnetic business cards used by, among others, real‐estate

agents for promotional purposes.14

Raw flexible magnets are produced by combining a mixture of magnetic ferrite powders

with a flexible resin binder.15  The resulting mixture is then either extruded, coated, or

calendared into the required shape and is then finished and prepared for shipment, typically in

rolls or coils.16  

In the original investigations, the Commission found a single domestic like product

consisting of raw flexible magnets that was coextensive with the scope of the investigations.17  

There is no new information obtained during these reviews that would suggest any reason to

                                                      

11 Raw Flexible Magnets from the People’s Republic of China, 78 Fed. Reg. 77425 (Dec. 23, 2013)

(final results of expedited sunset review of the countervailing duty order) and accompanying Issues and

Decision Memorandum.  Footnotes in the scope definition have been omitted. 12 CR at I‐7, PR at I‐6.

13 CR at I‐8‐9, PR at I‐6‐7. 14 CR at I‐8‐9, PR at I‐7.

15 CR at I‐9, PR at I‐7.

16 CR at I‐9, PR at I‐7‐8. 17 Original Determinations, USITC Pub. 4030 at 20.
6

revisit the Commission’s domestic like product definition from the original determinations, and

the responding domestic producers agree with that definition.18  Accordingly, we define the

domestic like product in accordance with Commerce’s scope description as raw flexible

magnets.

B. Domestic Industry  

Section 771(4)(A) of the Tariff Act defines the relevant industry as the domestic  

“producers as a whole of a domestic like product, or those producers whose collective output

of a domestic like product constitutes a major proportion of the total domestic production of

the product.”19  In defining the domestic industry, the Commission’s general practice has been

to include in the industry producers of all domestic production of the like product, whether toll‐

produced, captively consumed, or sold in the domestic merchant market.  

In its original investigations, the Commission defined a domestic industry consisting of

the domestic producers of raw flexible magnets.20  In these reviews, domestic producers have

stated that they agree with the domestic industry definition in the original investigations.21  

There is no information on the record showing that any of the domestic producers imported

subject merchandise from China or Taiwan during the review period or that otherwise presents

related party issues.  Accordingly, in light of the definition of the domestic like product, we

define the domestic industry as all U.S. producers of raw flexible magnets.

III. Cumulation

A. Legal Standard

With respect to five‐year reviews, section 752(a) of the Tariff Act provides as follows:

the Commission may cumulatively assess the volume and effect of imports of the

subject merchandise from all countries with respect to which reviews under

section 1675(b) or (c) of this title were initiated on the same day, if such imports

would be likely to compete with each other and with domestic like products in

the United States market.    The Commission shall not cumulatively assess the

volume and effects of imports of the subject merchandise in a case in which it

determines that such imports are likely to have no discernible adverse impact on

the domestic industry.22

                                                      

18 See generally CR at I‐8‐12, PR at I‐8‐11; Response at 30.

19 19 U.S.C. § 1677(4)(A).  The definitions in 19 U.S.C. § 1677 are applicable to the entire subtitle

containing the antidumping and countervailing duty laws, including 19 U.S.C. §§ 1675 and 1675a.  See 19

U.S.C. § 1677.

20 Original Determinations, USITC Pub. 4030 at 9.    21 Response at 31; Comments at 4.    22 19 U.S.C. § 1675a(a)(7).
7

Cumulation therefore is discretionary in five‐year reviews, unlike original investigations,

which are governed by section 771(7)(G)(i) of the Tariff Act.23  The Commission may exercise its

discretion to cumulate, however, only if the reviews are initiated on the same day, the

Commission determines that the subject imports are likely to compete with each other and the

domestic like product in the U.S. market, and imports from each such subject country are not

likely to have no discernible adverse impact on the domestic industry in the event of

revocation.  Our focus in five‐year reviews is not only on present conditions of competition, but

also on likely conditions of competition in the reasonably foreseeable future.

In the original investigations, the Commission cumulated subject imports from China

and Taiwan for the purposes of its material injury analysis.  The parties did not dispute the

appropriateness of cumulation.   The Commission found that raw flexible magnets from China

and Taiwan were significantly fungible in that they consisted of sheeting, strips, and profile

shapes which were manufactured using the same calendaring process.24  While the Commission

observed some differences in channels of distribution between the subject imports and the

domestic like product, it found that the record indicated geographic overlap among products

from different sources and that subject imports and the domestic like product were

simultaneously present in the U.S. market throughout the period of investigation.25

The Commission also decided to cumulate subject imports from China and Taiwan for

the purposes of its threat analysis.  It found that subject imports from China and Taiwan were

likely to compete under similar conditions of competition in the U.S. market in the imminent

future.26  It also found that imports from both subject countries were present in the U.S. market

throughout the original period of investigation (“POI”), which encompassed January 1, 2005 to

March 31, 2008, and were likely to continue to be present in the market in the imminent

future.  Finally, the Commission found that the industries in both China and Taiwan were

export‐oriented and that subject imports from China and Taiwan were generally good

substitutes.27

In these reviews, the statutory threshold for cumulation is satisfied because all reviews

were initiated on the same day, August 1, 2013.  In addition, we consider the following issues in

deciding whether to exercise our discretion to cumulate the subject imports:  (1) whether

imports from either of the subject countries are precluded from cumulation because they are

                                                      

23 19 U.S.C. § 1677(7)(G)(i); see also, e.g., Nucor Corp. v. United States, 601 F.3d 1291, 1293 (Fed.

Cir. 2010) (Commission may reasonably consider likely differing conditions of competition in deciding

whether to cumulate subject imports in five‐year reviews); Allegheny Ludlum Corp. v. United States, 475

F. Supp. 2d 1370, 1378 (Ct. Int’l Trade 2006) (recognizing the wide latitude the Commission has in

selecting the types of factors it considers relevant in deciding whether to exercise discretion to cumulate

subject imports in five‐year reviews); Nucor Corp. v. United States, 569 F. Supp. 2d 1328, 1337‐38 (Ct.

Int’l Trade 2008).

24 Original Determinations, USITC Pub. 4030 at 11.

25 Original Determinations, USITC Pub. 4030 at 11‐12.

26 Original Determinations, USITC Pub. 4030 at 12.

27 Original Determinations, USITC Pub. 4030 at 12.
8

likely to have no discernible adverse impact on the domestic industry; (2) whether there is a

likelihood of a reasonable overlap of competition among subject imports from the subject

countries and the domestic like product; and (3) whether subject imports are likely to compete

in the U.S. market under different conditions of competition.

B. Likelihood of No Discernible Adverse Impact

The statute precludes cumulation if the Commission finds that subject imports from a

country are likely to have no discernible adverse impact on the domestic industry.28  Neither the

statute nor the Uruguay Round Agreements Act (“URAA”) Statement of Administrative Action

(“SAA”) provides specific guidance on what factors the Commission is to consider in

determining that imports “are likely to have no discernible adverse impact” on the domestic

industry.29  With respect to this provision, the Commission generally considers the likely volume

of subject imports and the likely impact of those imports on the domestic industry within a

reasonably foreseeable time if the orders are revoked.  Our analysis for each of the subject

countries takes into account, among other things, the nature of the product and the behavior of

subject imports in the original investigations.

Based on the record in these reviews, we do not find that imports from either of the

subject countries would likely have no discernible adverse impact on the domestic industry in

the event of revocation.

China.  In the original investigations, the quantity of subject imports from China rose

sharply.  Subject imports from China were *** pounds in 2005, *** pounds in 2006, and ***

pounds in 2007.30  Shipments of imports from China as a share of apparent U.S. consumption

similarly rose, from *** percent in 2005 to *** percent in 2006 and *** percent in 2007.31  In

the original investigations, data from responding Chinese producers showed that their capacity

was *** pounds in 2005, *** pounds in 2006, and *** pounds in 2007.32   Capacity utilization

was *** percent in 2005, *** percent in 2006, and *** percent in 2007.33  Responding Chinese

producers exported *** percent of their raw flexible magnet shipments in 2005, *** percent in

2006, and *** percent in 2007.34   

The record of these reviews contains no empirical data regarding the characteristics of

subject imports or their volume over the review period.  The relevant HTS subheadings that

cover raw flexible magnets also include substantial nonsubject imports, rendering official

import statistics an unreliable measure of subject import activity.35  No respondents responded

to the notice of institution, and there are no meaningful public data concerning worldwide

                                                      

28 19 U.S.C. § 1675a(a)(7).

29 SAA, H.R. Rep. No. 103‐316, vol. I at 887 (1994).

30 Memorandum INV‐FF‐088 (“Original CR”) at Table IV‐2.   31 Original CR at Table IV‐8.

32 Original CR at Table VII‐2.

33 Original CR at Table VII‐2.

34 Original CR at Table VII‐2.

35 See CR at I‐20 n.42, PR at I‐13 n.42 (explaining lack of import data).
9

trade in raw flexible magnets.  Responding domestic producers report very few or no imports of

raw flexible magnets from China since the orders were imposed.   

Based on the rapid increase in the volume of subject imports from China observed in the

original investigations, as well as the Chinese industry’s excess capacity and export orientation

observed in those investigations, we do not find that subject imports from China would likely

have no discernible adverse impact on the domestic industry if the orders were revoked.

Taiwan.  In the original investigations, the quantity of subject imports from Taiwan was

*** pounds in 2005, *** pounds in 2006, and *** pounds in 2007.  Shipments of imports from

Taiwan as a share of apparent U.S. consumption were *** percent in 2005, *** percent in

2006, and *** percent in 2007.36  Producers in Taiwan reported *** pounds of capacity for each

year from 2005 to 2007.37  Capacity utilization was *** percent in 2005, *** percent in 2006,

and *** percent in 2007.38  Producers in Taiwan exported *** percent of their total shipments

in 2005, *** percent in 2006, and *** percent in 2007.39

As previously discussed, the record in these current reviews does not contain empirical

data pertaining to subject import volume or the subject industries for the review period.40  

Responding domestic producers report very few or no imports of raw flexible magnets from

Taiwan since the orders were imposed.41  Based on the volume of subject imports from Taiwan

observed in the original investigations, as well as the excess capacity and export orientation of

the industry in Taiwan that was observed in those investigations, we do not find that subject

imports from Taiwan would likely have no discernible adverse impact on the domestic industry

if the orders were revoked.

C. Likelihood of a Reasonable Overlap of Competition

The Commission generally has considered four factors intended to provide a framework

for determining whether subject imports compete with each other and with the domestic like

product.42  Only a “reasonable overlap” of competition is required.43  In five‐year reviews, the

                                                      

36 Original CR at Tables IV‐2 and IV‐8.

37 Original CR at Table VII‐4, as modified by Memorandum INV‐FF‐088.

38 Original CR at Table VII‐4, as modified by Memorandum INV‐FF‐088.

39 Original CR at Table VII‐4, as modified by Memorandum INV‐FF‐088.

40 See CR at I‐20 n.42, PR at I‐13 n.42 (explaining lack of import data). 41 CR at I‐20, PR at I‐13‐14.

42 The four factors generally considered by the Commission in assessing whether imports

compete with each other and with the domestic like product are as follows:  (1) the degree of fungibility

between subject imports from different countries and between subject imports and the domestic like

product, including consideration of specific customer requirements and other quality‐related questions;

(2) the presence of sales or offers to sell in the same geographical markets of imports from different

countries and the domestic like product; (3) the existence of common or similar channels of distribution

for subject imports from different countries and the domestic like product; and (4) whether subject

imports are simultaneously present in the market with one another and the domestic like product.  See,

e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989).
10

relevant inquiry is whether there likely would be competition even if none currently exists

because the subject imports are absent from the U.S. market.44

Fungibility.  The Commission found in the original investigations that there was

significant fungibility among products from different sources.45  Market participants

overwhelmingly described raw flexible magnets, whether produced domestically or from

subject sources, as at least sometimes interchangeable, and both the domestic like product and

subject imports from China and Taiwan were produced using the same calendaring process.46  

There is no information in these reviews to warrant a different finding.

Channels of Distribution.  In the original investigations, the Commission observed that a

substantial portion of the sales of both the domestic like product and subject imports was to

the same type of end user, printers.47  In these reviews, the domestic producers indicate that

they continue to sell raw flexible magnets to OEMs and printers.48  There are no new data on

the record suggesting the subject imports would not participate in these channels of

distribution, as they did during the original investigations, if the orders were revoked.49  

Geographic Overlap.  In the original investigations, all domestic producers and 17 of 30

responding importers reported selling nationwide.50  The Commission found there was

geographic overlap among products from different sources in the regions of the country where

subject imports were sold.51  In these reviews, domestic producers indicate that major U.S.

purchasers of the domestic like product are located in several different regions.52  There are no

new data on the record suggesting that the geographic distribution of the subject imports

would not be similar to that in the original investigations if the orders were revoked.

                                                                                                                                                                              

(...Continued)

43 See Mukand Ltd. v. United States, 937 F. Supp. 910, 916 (Ct. Int’l Trade 1996); Wieland Werke,

718 F. Supp. at 52 (“Completely overlapping markets are not required.”); United States Steel Group v.

United States, 873 F. Supp.  673, 685 (Ct. Int’l Trade 1994), aff’d, 96 F.3d 1352 (Fed. Cir. 1996).  We note,

however, that there have been investigations where the Commission has found an insufficient overlap in

competition and has declined to cumulate subject imports.  See, e.g., Live Cattle from Canada and

Mexico, Inv. Nos. 701‐TA‐386 and 731‐TA‐812‐13 (Preliminary), USITC Pub. 3155 at 15 (Feb. 1999), aff’d

sub nom, Ranchers‐Cattlemen Action Legal Foundation v. United States, 74 F. Supp. 2d 1353 (Ct. Int’l

Trade 1999); Static Random Access Memory Semiconductors from the Republic of Korea and Taiwan, Inv.

Nos. 731‐TA‐761‐62 (Final), USITC Pub. 3098 at 13‐15 (Apr. 1998). 44 See generally, Chefline Corp. v. United States, 219 F. Supp. 2d 1313, 1314 (Ct. Int’l Trade 2002).

45 Original Determinations, USITC Pub. 4030 at 10‐11.

46 Original Determinations, USITC Pub. 4030 at 11. 47 Original Determinations, USITC Pub. 4030 at 11.  The largest share of U.S. producers’

shipments went to original equipment manufacturers (“OEMs”) and the second largest share went to

printers.   The majority of shipments of subject imports from China went to printers, and the second

largest share went to OEMs.  The majority of shipments of subject imports from Taiwan went to

printers.  Id.   48 See Response at 13.

49 Cf. CR at I‐15, PR at I‐10.

50 Original Determinations, USITC Pub. 4030 at 11.

51 Original Determinations, USITC Pub. 4030 at 11.

52 Response at 28.
11

Simultaneous Presence in Market.  In the original investigations, the Commission found

that subject imports and the domestic like product were present in the U.S. market throughout

the POI.53  In these reviews, domestic producers indicate that they have continued to

participate in the U.S. market throughout the period of review.54  As previously stated, there are

no new empirical data on the record in these reviews concerning the presence of subject

imports since the imposition of the orders.  Domestic producers posit that subject imports have

likely entered the United States in small quantities during the review period.55  Thus, there is no

record information suggesting the subject imports would not have a simultaneous presence in

the market, as they did during the original investigations, if the orders were revoked

Conclusion.  The record of these expedited reviews contains very limited information,

and no empirical data, concerning subject imports from China or Taiwan in the U.S. market or

changes in the foreign industries since the imposition of the orders.  By the same token, there is

nothing in the record that indicates that, upon revocation, imports from either subject country

would have different characteristics, distribution patterns, or geographic presence than they

did during the original POI.  In light of this, and the absence of any contrary argument, we find a

likely reasonable overlap of competition between and among subject imports from each

subject country and the domestic like product if the orders under review were revoked.    

D. Likely Conditions of Competition  

In determining whether to exercise our discretion to cumulate the subject imports, we

assess whether subject imports from China and Taiwan likely would compete under similar or

different conditions in the U.S. market if the orders were revoked.  

The record of the original investigations, which constitutes the available information for

these reviews concerning the subject industries, shows that the industries in both countries

were export‐oriented and participated in the U.S. market.56   The record in these reviews does

not indicate that there would likely be any significant difference in the conditions of

competition between subject imports from China and Taiwan if the orders were revoked.57  

Accordingly, we exercise our discretion to cumulate subject imports from China and Taiwan.  

                                                      

53 Original Determinations, USITC Pub. 4030 at 11.

54 See Response at 16. 55 See CR at I‐20, PR at I‐14.

56 Original Determinations, USITC Pub. 4030 at 12. 57 Commissioner Pinkert explains his analysis of other considerations as follows.  Where, in a

five‐year review, he does not find that imports of the subject merchandise would be likely to have no

discernible adverse impact on the domestic industry in the event of revocation, and finds that such

imports would be likely to compete with each other and with the domestic like product in the U.S.

market, he cumulates them unless there is a condition or propensity – not merely a trend – that is likely

to persist for a reasonably foreseeable time and that significantly limits competition such that

cumulation is not warranted.  He finds that there is no evidence on this record of a condition or

propensity warranting non‐cumulation with respect to imports from the subject countries.  

Consequently, he has cumulated those imports.  
12

IV. Revocation of the Antidumping and Countervailing Duty Orders Would

Likely Lead to Continuation or Recurrence of Material Injury Within a

Reasonably Foreseeable Time  

A. Legal Standards

In a five‐year review conducted under section 751(c) of the Tariff Act, Commerce will

revoke an antidumping or countervailing duty order unless: (1) it makes a determination that

dumping or subsidization is likely to continue or recur and (2) the Commission makes a

determination that revocation of the antidumping or countervailing duty order “would be likely

to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”58  

The SAA states that “under the likelihood standard, the Commission will engage in a

counterfactual analysis; it must decide the likely impact in the reasonably foreseeable future of

an important change in the status quo – the revocation or termination of a proceeding and the

elimination of its restraining effects on volumes and prices of imports.”59  Thus, the likelihood

standard is prospective in nature.60  The U.S. Court of International Trade has found that

“likely,” as used in the five‐year review provisions of the Act, means “probable,” and the

Commission applies that standard in five‐year reviews.61  

The statute states that “the Commission shall consider that the effects of revocation or

termination may not be imminent, but may manifest themselves only over a longer period of

time.”62  According to the SAA, a “‘reasonably foreseeable time’ will vary from case‐to‐case, but

                                                      

58 19 U.S.C. § 1675a(a).

59 SAA at 883‐84.  The SAA states that “{t}he likelihood of injury standard applies regardless of

the nature of the Commission’s original determination (material injury, threat of material injury, or

material retardation of an industry).  Likewise, the standard applies to suspended investigations that

were never completed.”  Id. at 883.

60 While the SAA states that “a separate determination regarding current material injury is not

necessary,” it indicates that “the Commission may consider relevant factors such as current and likely

continued depressed shipment levels and current and likely continued {sic} prices for the domestic like

product in the U.S. market in making its determination of the likelihood of continuation or recurrence of

material injury if the order is revoked.”  SAA at 884.

61 See NMB Singapore Ltd. v. United States, 288 F. Supp. 2d 1306, 1352 (Ct. Int’l Trade 2003)

(“‘likely’ means probable within the context of 19 U.S.C. § 1675(c) and 19 U.S.C. § 1675a(a)”), aff’d

mem., 140 Fed. Appx. 268 (Fed. Cir. 2005); Nippon Steel Corp. v. United States, 26 CIT 1416, 1419 (2002)

(same); Usinor Industeel, S.A. v. United States, 26 CIT 1402, 1404 nn.3, 6 (2002) (“more likely than not”

standard is “consistent with the court’s opinion;” “the court has not interpreted ‘likely’ to imply any

particular degree of ‘certainty’”); Indorama Chemicals (Thailand) Ltd. v. United States, 26 CIT 1059, 1070

(2002) (“standard is based on a likelihood of continuation or recurrence of injury, not a certainty”);

Usinor v. United States, 26 CIT 767, 794 (2002) (“‘likely’ is tantamount to ‘probable,’ not merely

‘possible’”).

62 19 U.S.C. § 1675a(a)(5).
13

normally will exceed the ‘imminent’ timeframe applicable in a threat of injury analysis in

original investigations.”63

Although the standard in a five‐year review is not the same as the standard applied in an

original investigation, it contains some of the same fundamental elements.  The statute

provides that the Commission is to “consider the likely volume, price effect, and impact of

imports of the subject merchandise on the industry if the orders are revoked or the suspended

investigation is terminated.”64  It directs the Commission to take into account its prior injury

determination, whether any improvement in the state of the industry is related to the order or

the suspension agreement under review, whether the industry is vulnerable to material injury if

the orders are revoked or a suspension agreement is terminated, and any findings by

Commerce regarding duty absorption pursuant to 19 U.S.C. § 1675(a)(4).65  The statute further

provides that the presence or absence of any factor that the Commission is required to consider

shall not necessarily give decisive guidance with respect to the Commission’s determination.66

In evaluating the likely volume of imports of subject merchandise if the orders under

review are revoked and/or a suspended investigation is terminated, the Commission is directed

to consider whether the likely volume of imports would be significant either in absolute terms

or relative to production or consumption in the United States.67  In doing so, the Commission

must consider “all relevant economic factors,” including four enumerated factors:  (1) any likely

increase in production capacity or existing unused production capacity in the exporting country;

(2) existing inventories of the subject merchandise, or likely increases in inventories; (3) the

existence of barriers to the importation of the subject merchandise into countries other than

the United States; and (4) the potential for product shifting if production facilities in the foreign

country, which can be used to produce the subject merchandise, are currently being used to

produce other products.68

In evaluating the likely price effects of subject imports if the orders under review are

revoked and/or a suspended investigation is terminated, the Commission is directed to

consider whether there is likely to be significant underselling by the subject imports as

compared to the domestic like product and whether the subject imports are likely to enter the

                                                      

63 SAA at 887.  Among the factors that the Commission should consider in this regard are “the

fungibility or differentiation within the product in question, the level of substitutability between the

imported and domestic products, the channels of distribution used, the methods of contracting (such as

spot sales or long‐term contracts), and lead times for delivery of goods, as well as other factors that may

only manifest themselves in the longer term, such as planned investment and the shifting of production

facilities.”  Id. 64 19 U.S.C. § 1675a(a)(1).

65 19 U.S.C. § 1675a(a)(1). Commerce has not made any duty absorption findings with respect to

the orders currently under review.  CR at I‐4, PR at I‐3.

66 19 U.S.C. § 1675a(a)(5).  Although the Commission must consider all factors, no one factor is

necessarily dispositive.  SAA at 886.

67 19 U.S.C. § 1675a(a)(2).

68 19 U.S.C. § 1675a(a)(2)(A‐D).
14

United States at prices that otherwise would have a significant depressing or suppressing effect

on the price of the domestic like product.69

In evaluating the likely impact of imports of subject merchandise if the orders under

review are revoked and/or a suspended investigation is terminated, the Commission is directed

to consider all relevant economic factors that are likely to have a bearing on the state of the

industry in the United States, including but not limited to the following:  (1) likely declines in

output, sales, market share, profits, productivity, return on investments, and utilization of

capacity; (2) likely negative effects on cash flow, inventories, employment, wages, growth,

ability to raise capital, and investment; and (3) likely negative effects on the existing

development and production efforts of the industry, including efforts to develop a derivative or

more advanced version of the domestic like product.70  All relevant economic factors are to be

considered within the context of the business cycle and the conditions of competition that are

distinctive to the industry.  As instructed by the statute, we have considered the extent to

which any improvement in the state of the domestic industry is related to the orders under

review and whether the industry is vulnerable to material injury upon revocation.71

No respondent interested party participated in these expedited reviews.  The record,

therefore, contains limited new information with respect to the raw flexible magnet industries

in China and Taiwan.  There also is limited information on the raw flexible magnet market in the

United States during the period of review.  Accordingly, for our determination, we rely as

appropriate on the facts available from the original investigations and data submitted in the

response to the notice of institution.

B. Conditions of Competition and the Business Cycle

In evaluating the likely impact of the subject imports on the domestic industry if an

order is revoked, the statute directs the Commission to consider all relevant economic factors

“within the context of the business cycle and conditions of competition that are distinctive to

the affected industry.”72  The following conditions of competition inform our determinations.

Demand Conditions.  In the original investigations, the Commission found that demand

for raw flexible magnets was closely linked to the demand for end‐use products, such as

promotional materials, magnetic signs, and refrigerators, into which they are incorporated as

                                                      

69 See 19 U.S.C. § 1675a(a)(3).  The SAA states that “{c}onsistent with its practice in

investigations, in considering the likely price effects of imports in the event of revocation and

termination, the Commission may rely on circumstantial, as well as direct, evidence of the adverse

effects of unfairly traded imports on domestic prices.”  SAA at 886.

70 19 U.S.C. § 1675a(a)(4). 71 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the

order is revoked, the Commission “considers, in addition to imports, other factors that may be

contributing to overall injury.  While these factors, in some cases, may account for the injury to the

domestic industry, they may also demonstrate that an industry is facing difficulties from a variety of

sources and is vulnerable to dumped or subsidized imports.”  SAA at 885.

72 19 U.S.C. § 1675a(a)(4).
15

gaskets.73  Thus, demand for raw flexible magnets tends to track changes in the U.S. economy,

particularly the real estate market.74  The Commission found that the largest share of U.S.

producers’ shipments went to OEMs and that the second largest share went to printers.75  The

Commission found that apparent U.S. consumption of raw flexible magnets declined during the

POI.76   

The record in these reviews contains no usable data to calculate apparent U.S.

consumption because, as stated earlier, meaningful import data are unavailable.77  The limited

information on the record indicates that the conditions of competition pertaining to demand

have not changed significantly since the original investigations.  The domestic producers report

that demand for raw flexible magnets is still driven largely by demand for end‐use products and

by the real estate market.  They further report that demand has declined since the beginning of

the original POI and has not yet fully recovered from the effects of the recession in late 2008

and 2009.78

Supply Conditions.  In the original investigations, the Commission found that U.S.

producers were the dominant suppliers of raw flexible magnets in the U.S. market, but that

their market share declined over the POI.79  Virtually all of the market not supplied by the

domestic industry was supplied by subject imports, which gained an increasing share of the U.S.

merchant market and the total U.S. market during the POI.80  Nonsubject imports supplied

minimal amounts of raw flexible magnets during the POI.81  

In these reviews, the record suggests that the imposition of antidumping duty and

countervailing duty orders resulted in subject imports declining to very low levels in the U.S.

market.82  Responding producers reported that they produced *** pounds of raw flexible

magnets in 2012.83  Nonsubject imports are present in the U.S. market, but because the record

does not contain usable import data, the quantity of nonsubject imports cannot be ascertained.  

Domestic producers report that nonsubject imports from Vietnam are increasing in the U.S.

market.84

Substitutability.  The Commission found in the original investigations that the domestic

like product and subject imports were generally substitutable and therefore price played an

                                                      

73 Original Determinations, USITC Pub. 4030 at 15.   In the original investigations, the

Commission found that the conditions for application of the statutory captive production provision were

satisfied. The statutory provision regarding captive production does not apply in 5 year reviews.   74 Original Determinations, USITC Pub. 4030 at 15. 75 Original Determinations, USITC Pub. 4030 at 16.

76 Original Determinations, USITC Pub. 4030 at 15. 77 See CR at I‐20 n.42, PR at I‐13 n.42.    78 Comments at 9.

79 Original Determinations, USITC Pub. 4030 at 17.

80 Original Determinations, USITC Pub. 4030 at 17.

81 Original Determinations, USITC Pub. 4030 at 17.

82 Response at 16.

83 CR/PR at Table I‐2.

84 Comments at 9.
16

important role in purchasing decisions.85  Purchasers reported that price was a “very important”

factor in purchasing decisions, and price was listed after only quality as the most important

factor in such decisions.86   

In these reviews, there is no new information on the record to suggest that the

substitutability of raw flexible magnets has changed since the original investigations.  The

domestic producers assert that price continues to play an important role in purchasing

decisions.87  Accordingly, we again find that the domestic like product and subject raw flexible

magnets are generally substitutable and that price continues to be an important factor in

purchasing decisions.

C. Likely Volume of Subject Imports

Original Investigations.  In the original investigations, the Commission found that

cumulated subject imports increased sharply during the period of investigation even while

apparent U.S. consumption, particularly in the merchant market, declined.88  Consequently,

subject imports increased their market share at a greater rate than their increase in volume.  

The Commission found that the increase in subject imports was significant, both on an absolute

basis and relative to consumption.89

In its analysis of threat of material injury, the Commission found that substantially

increased imports of the subject merchandise were imminent.  Cumulated subject imports had

grown rapidly on both an absolute and relative basis during the POI.  Moreover, the subject

producers had substantial unused capacity, and the projected unused capacity of the reporting

subject producers indicated that they had the potential ability to increase shipments to the

United States far in excess of the levels observed during the POI.90  The Commission further

found that the subject producers were highly export‐oriented and that their exports to the

United States increased at a *** rate during the POI than their exports to any other markets or

their home market shipments.91  Finally, the Commission observed that U.S. importers had

increased their inventories of subject imports.  The Commission concluded that subject imports,

                                                      

85 Original Determinations, USITC Pub. 4030 at 17.  Purchasers reported that subject imports

from China were comparable to the domestic like product with respect to seven non‐price factors and

that the domestically produced product was superior with respect to six factors.  Subject imports from

Taiwan were reported comparable to the domestic like product with respect to five non‐price factors,

and the domestically produced product was reported superior with respect to seven factors.  Id.   86 Original Determinations, USITC Pub. 4030 at 17.

87 Comments at 9.

88 Original Determinations, USITC Pub. 4030 at 20.  Cumulated subject imports increased from

*** pounds in 2005 to *** pounds in 2006 and *** pounds in 2007.  Id. 89 Original Determinations, USITC Pub. 4030 at 20.

90 Original Determinations, USITC Pub. 4030 at 21.

91 Original Determinations, USITC Pub. 4030 at 21.
17

which were significant during the POI, were likely to increase substantially in the imminent

future. 92

Current Reviews.  The information available in these reviews suggests that subject

imports have declined to low levels in the U.S. market since the imposition of the orders.  The

record does not contain any current data specific to raw flexible magnet production or capacity

in China or Taiwan because subject producers declined to participate or furnish information in

these reviews.93   There is evidence, however, that subject producers have demonstrated

continued interest in exporting to the United States by making solicitations to potential U.S.

customers.94  There is no indication in the record that subject producers’ capacity and

production have declined appreciably since the original investigations.

We therefore find that, in light of their historically large production and capacity and

their export orientation, the raw flexible magnet industries in China and Taiwan have the ability

to increase exports of subject merchandise to the United States upon revocation, as they did

during the original investigations.95  Moreover, we find that they have the incentive to increase

exports to the United States significantly upon revocation in light of their prior and current

interest in supplying the U.S. market.

In light of these factors, we find that the subject producers are likely, absent the

restraining effects of the orders, to direct significant volumes of raw flexible magnets to the

U.S. market, as they did during the original investigations.  We find that the likely volume of

subject imports, both in absolute terms and relative to consumption in the United States, would

be significant if the orders were revoked.    

D. Likely Price Effects  

Original Investigations.  In the original investigations, the Commission found that

subject imports significantly undersold the domestic like product during the POI.  Cumulated

subject imports undersold the domestic product in 72 out of 101 quarterly pricing

comparisons.96  The margins of underselling averaged 19.2 percent.97  However, because prices

for the domestic like product generally increased during the POI while prices for subject imports

followed no clear price trend, the Commission concluded that subject imports did not have

significant price‐depressing effects.98  While there was some indication of price suppression

                                                      

92 Original Determinations, USITC Pub. 4030 at 21.

93 For the same reason, the record does not contain current information about existing

inventories of the subject merchandise or any likely increase in such inventories.  The Commission did

not rely on product shifting as a basis for its threat analysis in the original investigations.  See Original

Determinations, USITC Pub. 4030 at 21‐22.   94 Response at 23.

95 There are no antidumping or countervailing duty orders on subject imports in effect in any

third countries.

96 Original Determinations, USITC Pub. 4030 at 22.

97 Original Determinations, USITC Pub. 4030 at 22.

98 Original Determinations, USITC Pub. 4030 at 23.
18

during the POI, the Commission stated it could not find that subject imports had significant

price‐suppressing effects.99

In its analysis of threat of material injury, the Commission found that several changes in

the domestic industry’s cost structure were likely to occur and, as a result, increasing volumes

of low‐priced subject imports would likely negatively affect prices in the imminent future.100  

Specifically, the Commission found that the domestic industry had faced fairly stable costs on a

per unit basis in 2007, but that this stable cost environment was unlikely to continue due to an

increase in per unit raw materials costs.101  After observing that underselling at high margins

was likely to continue in the imminent future, the Commission found it unlikely that the

domestic industry would be able to raise prices commensurately with cost increases that were

observed during the latter portion of the POI.  The Commission thus concluded that subject

imports would likely continue their significant underselling and would likely have significant

price‐suppressing effects on the domestic like product in the imminent future.102

Current Reviews.  There is no new product‐specific pricing information on the record of

these expedited reviews.  Given the substitutable nature of raw flexible magnets, we find that

price continues to be an important factor in purchasing decisions.  In light of the underselling at

high margins that occurred during the original POI, if the antidumping and countervailing duty

orders were revoked, subject imports from China and Taiwan would likely undersell the

domestic like product at high margins as they did during the original investigations.  This in turn

would likely cause the domestic producers to cut prices or restrain price increases to avoid

losing sales.   

Accordingly, given the likely significant volume of subject imports, we conclude that

significant underselling of the domestic like product by subject imports to gain market share is

likely and that the significant volume of low‐priced subject imports would likely have significant

depressing or suppressing effects on the price of the domestic like product if the antidumping

and countervailing duty orders were revoked.

                                                      

99 Original Determinations, USITC Pub. 4030 at 23.  Specifically, when the presence of subject

imports increased, the ratio of cost of goods sold (“COGS”) to net sales in the merchant market declined,

which did not suggest price suppression.  Id.

100 Original Determinations, USITC Pub. 4030 at 23.

101 Original Determinations, USITC Pub. 4030 at 23‐24.

102 Original Determinations, USITC Pub. 4030 at 24.
19

E. Likely Impact103  

Original Investigations.  In its original investigations, the Commission found mixed

results regarding the domestic industry’s profitability.104  Capacity increased during the POI, but

output declined.105  Production initially increased, but then declined toward the end of the

POI.106  Capacity utilization, commercial shipments, and inventories declined throughout the

POI.107  Employment‐related indicators were also mixed, with the number of workers increasing

and then declining during the POI.  Hourly wages and productivity were higher at the end of the

POI than at the beginning.108  Finally, the domestic industry’s financial performance fluctuated

during the POI.  The Commission concluded that it could not find evidence of material injury

because the domestic industry’s operating margins and operating income increased in 2007,

when subject import volume and market share also increased.109

In its analysis of threat of material injury, the Commission found that the imminent

threat of increased volume, underselling, and price suppression by subject imports would

accelerate the adverse trends the domestic industry experienced in the latter portion of the

POI.110  Specifically, the Commission found that production, shipments, market share, capacity

utilization, and employment levels would be negatively impacted.111  The Commission found it

likely that in the presence of increased subject imports, the domestic industry would not be

able to recover the increased costs that were predicted for the future, resulting in increased

                                                      

103 Under the statute, “the Commission may consider the magnitude of the margin of dumping”

in making its determination in a five‐year review.  19 U.S.C. § 1675a(a)(6).  The statute defines the

“magnitude of the margin of dumping” to be used by the Commission in five‐year reviews as “the

dumping margin or margins determined by the administering authority under section 1675a(c)(3) of this

title.”  19 U.S.C. § 1677(35)(C)(iv); see also SAA at 887.

Commerce expedited its antidumping duty review determinations and found that revocation of

the antidumping duty orders would be likely to lead to continuation or recurrence of dumping at the

following margins:  185.28 percent as the China‐wide rate, 105.00 percent as the China separate rate,  

38.03 percent for the individually investigated exporters and producers in Taiwan, and 31.20 percent as

the Taiwan all others rate.  Raw Flexible Magnets from the People’s Republic of China and Taiwan, 78

Fed. Reg.  77424 (listing each individually investigated exporter and/or producer).  Commerce also

expedited its countervailing duty review determination and found that revocation of the order would

likely lead to continuation or recurrence of a countervailable subsidy at the following rates:  109.95

percent ad valorem for individually investigated producer/exporters and 109.95 percent as the all others

rate.  Raw Flexible Magnets from the People’s Republic of China, 78 Fed. Reg.  77425 (listing each

individually investigated exporter and/or producer).

104 Original Determinations, USITC Pub. 4030 at 25‐26.

105 Original Determinations, USITC Pub. 4030 at 25.

106 Original Determinations, USITC Pub. 4030 at 25.

107 Original Determinations, USITC Pub. 4030 at 25.

108 Original Determinations, USITC Pub. 4030 at 26.

109 Original Determinations, USITC Pub. 4030 at 26.

110 Original Determinations, USITC Pub. 4030 at 27. 111 Original Determinations, USITC Pub. 4030 at 27.
20

losses and overall deterioration in the financial performance of the domestic industry as a

whole.112 The Commission thus concluded that the domestic industry was threatened with

material injury by reason of subject imports from China and Taiwan.113

Current Reviews.   Because these are expedited reviews, we have only limited

information with respect to the domestic industry’s financial performance.114  The information

available concerning the domestic industry’s condition in these reviews consists of the data that

the domestic producers provided in response to the notice of institution.  The limited record is

insufficient for us to make a finding on whether the domestic industry is vulnerable to the

continuation or recurrence of material injury in the event of revocation of the orders.115

In 2012, the capacity of the reporting U.S. raw flexible magnet producers was ***

pounds, production was *** pounds, and capacity utilization was *** percent.116  U.S.

shipments were *** pounds, and domestic producers reported an *** of *** from sales of ***,

resulting in an *** of *** percent in 2012.117   

Based on the information on the record, we find that should the order be revoked, the

likely significant volume and adverse price effects of the subject imports would likely have a

significant adverse impact on the production, shipments, sales, market share, and revenues of

the domestic industry.  These declines would likely have a direct adverse impact on the

domestic industry’s profitability.

In our analysis, we typically examine known factors other than subject imports which

may cause injury so as not to attribute likely injury caused by these factors to the subject

imports.  In these reviews, however, there are no factors other than the subject imports that

are known to be a likely cause of material injury.

Accordingly, we conclude that, if the orders were revoked, subject imports would likely

have a significant adverse impact on the domestic industry within a reasonably foreseeable

time.

V. Conclusion

For the above reasons, we determine that revocation of the antidumping and

countervailing duty orders on raw flexible magnets from China and Taiwan would likely lead to

                                                      

112 Original Determinations, USITC Pub. 4030 at 27.

113 Original Determinations, USITC Pub. 4030 at 27.   114 In the original investigations, the record contained data from seven responding domestic

producers, whereas in these expedited reviews the record contains data from two responding domestic

producers.

115 Based on the record of this review, Commissioner Pinkert finds that the domestic industry is

not vulnerable to the continuation or recurrence of material injury in the event of revocation of the

orders.  The domestic producers that responded to the Commission’s notice of institution, which

accounted for *** percent of industry production in 2012, reported an *** of *** percent.  CR/PR at

Tables I‐1 and I‐2.  In addition, those firms had an *** in 2012 that *** the domestic industry’s *** in

any year during the period of the original investigation.

116 CR/PR at Table I‐2. 117 CR/PR at Table I‐2.
21

continuation or recurrence of material injury to an industry in the United States within a

reasonably foreseeable time.

I‐1

INFORMATION OBTAINED IN THE REVIEW

INTRODUCTION

Background

Effective August 1, 2013, the U.S. International Trade Commission (“Commission” or

“USITC”) gave notice, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the

Act”),1 that it had instituted a review to determine whether revocation of the countervailing

duty order on raw flexible magnets from China and the antidumping duty orders on raw flexible

magnets from China and Taiwan would likely lead to the continuation or recurrence of material

injury to a domestic industry.2 3 On November 20, 2013, the Commission determined that it

would conduct an expedited review pursuant to section 751(c)(3) of the Act.4 The following

tabulation presents information relating to the background and schedule of this proceeding:

                                                      

1 19 U.S.C. 1675(c). 2 Raw Flexible Magnets From China and Taiwan; Institution of a Five‐Year Reviews, 78 FR 46604,

August 1, 2013. All interested parties were requested to respond to this notice by submitting the

information requested by the Commission.

3 In accordance with section 751(c) of the Act, the U.S. Department of Commerce (“Commerce”)

published a notice of initiation of five‐year reviews of the subject countervailing and antidumping duty

orders concurrently with the Commission’s notice of institution. Initiation of Five‐Year (“Sunset”)

Review, 78 FR 46575, August 1, 2013. 4 Raw Flexible Magnets from China and Taiwan; Scheduling of Expedited Five‐Year Reviews

Concerning the Countervailing Duty Order on Raw Flexible Magnets from China and the Antidumping

Duty Orders on Raw Flexible Magnets from China and Taiwan, 78 FR 73561, December 6, 2013. The

Commission received one joint submission in response to its notice of institution in the subject review.  

It was filed on behalf of Magnum Magnetics Corporation (“Magnum”) and ***, U.S. producers of the

domestic like product. U.S. producers are believed to account for *** percent of production of the

domestic like product in 2012. The Commission did not receive any responses from producers in China

or Taiwan or U.S. importers of the subject merchandise. The Commission determined that the domestic

interested party group response to its notice of institution was adequate and that the respondent

interested party group response was inadequate. In the absence of respondent interested party

responses and any other circumstances that would warrant the conduct of full reviews, the Commission

determined to conduct expedited reviews.
I‐2

Effective date Action 

September 17, 

2008 

Commerce’s antidumping duty order on raw flexible magnets from China (73 FR 

53847, September 17, 2008) 

http://www.gpo.gov/fdsys/pkg/FR-2008-09-17/pdf/E8-21717.pdf

Commerce’s antidumping duty order on raw flexible magnets from Taiwan (73 FR 

53848, September 17, 2008) 

http://www.gpo.gov/fdsys/pkg/FR-2008-09-17/pdf/E8-21718.pdf

Commerce’s countervailing duty order on raw flexible magnets from China (73 FR 

53849, September 17, 2008) 

http://www.gpo.gov/fdsys/pkg/FR-2008-09-17/pdf/E8-21719.pdf

August 1, 2013 

Commission’s institution of first five-year reviews (78 FR 46604, August 1, 2013) 

http://www.gpo.gov/fdsys/pkg/FR-2013-08-01/pdf/2013-18107.pdf

August 1, 2013 

Commerce’s initiation of first five-year reviews (78 FR 46575, August 1, 2013) 

http://www.gpo.gov/fdsys/pkg/FR-2013-08-01/pdf/2013-18554.pdf

November 20, 

2013 

Commission’s determination to conduct an expedited five-year review (78 FR 73561, 

December 6, 2013) 

http://www.gpo.gov/fdsys/pkg/FR-2013-12-06/pdf/2013-29182.pdf

The press release announcing the Commission’s determination concerning adequacy 

and the conduct of an expedited review can be found at 

(http://www.usitc.gov/press_room/news_release/2013/er1120ll2.htm) 

A summary of the Commission’s votes concerning the adequacy and the conduct of 

an expedited review can be found at 

(http://iapps2.usitc.gov/sunset/caseProfSuppAttmnt/download/11588). The 

Commission’s explanation of its determination can be found at 

(http://iapps2.usitc.gov/sunset/caseProfSuppAttmnt/download/11591). 

December 23, 

2013 

Commerce’s final result of expedited five-year review of the countervailing duty order 

on imports from China 

(http://www.gpo.gov/fdsys/pkg/FR-2013-12-23/pdf/2013-30329.pdf) 

Commerce’s final result of expedited five-year review of the antidumping duty orders 

on imports from China and Taiwan 

(http://www.gpo.gov/fdsys/pkg/FR-2013-12-23/pdf/2013-30511.pdf) 

January 6, 2014 Commission’s vote 

January 15, 2014 Commission’s determination 

The original investigations

The original investigation resulted from a petition filed on September 21, 2007, by

Magnum Magnetics Copr. (“Magnum”) alleging that an industry in the United States was

materially injured and threatened with material injury by reason of subsidized imports of raw

flexible magnets from China and less‐than‐fair‐value (“LTFV”) imports of raw flexible magnets

from China and Taiwan. On July 10, 2008, Commerce determined that countervailable subsidies

were being provided to producers and exporters of raw flexible magnets from China.5

Commerce also determined on the same date that imports of raw flexible magnets from China

                                                      

5 Raw Flexible Magnets from the People’s Republic of China: Final Affirmative Countervailing Duty

Determination, 73 FR 39667, July 10, 2008.
I‐3

and Taiwan were being sold at LTFV.6 On August 25, 2008, the Commission issued its

determination that an industry in the United States was threatened with material injury by

reason of subsidized imports from China of raw flexible magnets. The Commission further

determined that an industry in the United States was threatened with material injury be reason

of LTFV imports of raw flexible magnets from China and Taiwan.7 On September 17, 2008,

Commerce issued a countervailing duty order on raw flexible magnets from China,8 and

antidumping duty orders on raw flexible magnets from China and Taiwan.9 10

Commerce’s reviews

Commerce has initiated and rescinded one new shipper review of the countervailing

duty order on imports from China and rescinded one new shipper review of the antidumping

duty order on imports from China.11 Commerce has not conducted any administrative reviews,

nor issued any duty absorption findings, and has not conducted changed circumstances reviews

or scope inquiry reviews with respect to raw flexible magnets from China or Taiwan.

Commerce’s results of its expedited sunset reviews of the subject countervailing duty

order and antidumping duty orders were approved on December 16, 2013. Commerce

determined that revocation of the countervailing duty order on imports from China would likely

to lead to continuation or recurrence of countervailable subsidy rate of 109.95 percent.12

Commerce determined that revocation of the antidumping duty order on imports from China

would likely lead to continuation or recurrence of dumping margins of 105.00‐185.28 percent13

                                                      

6 Final Determination of Sales at Less Than Fair Value: Raw Flexible Magnets from the People’s

Republic of China, 73 FR 39669, July 10, 2008 and Notice of Final Determination of Sales at Less Than Fair

Value: Raw Flexible Magnets From Taiwan, 73 FR 39673, July 10, 2008. 7 Raw Flexible Magnets From China and Taiwan: Determinations, 73 FR 51317, September 2, 2008.

8 Raw Flexible Magnets from the People’s Republic of China: Countervailing Duty Order, 73 FR 53849,

September 17, 2008.

9 Antidumping Duty Order: Raw Flexible Magnets from the People’s Republic of China, 73 FR 53847,

September 17, 2008.

10 Antidumping Duty Order: Raw Flexible Magnets from Taiwan, 73 FR 53848, September 17, 2008. 11 Raw Flexible Magnets From the People’s Republic of China: Initiation of Antidumping Duty New

Shipper Review, 75 FR 22740, April 30, 2010, Raw Flexible Magnets From the People’s Republic of China:

Initiation of Countervailing Duty New Shipper Review, 75 FR 22741, April 30, 2010, Raw Flexible Magnets

From the People’s Republic of China: Notice of Rescission of Countervailing Duty New Shipper Review, 75

FR 52721, August 27, 2010, and Raw Flexible Magnets From the People’s Republic of China: Rescission of

New Shipper Review, 75 FR 61425, October 5, 2010. 12 Raw Flexible Magnets from the People’s Republic of China: Final Results of Expedited Sunset

Review, 78 FR 77425, December 23, 2013.

13 Raw Flexible Magnets from the People’s Republic of China and Taiwan: Final Results of the

Expedited Sunset Reviews of the Antidumping Duty Orders, 78 FR 77423, December 23, 2013.
I‐4

and that revocation of the antidumping duty order on imports from Taiwan would likely lead to

continuation or recurrence of dumping margins of 31.20‐38.03 percent.14

THE PRODUCT

Commerce’s scope

In its countervailing duty and antidumping duty orders, Commerce defined the subject

merchandise as:

The products covered by this order are certain flexible magnets

regardless of shape,15 color, or packaging.16 Subject flexible magnets are

bonded magnets composed (not necessarily exclusively) of (i) any one or

combination of various flexible binders (such as polymers or co–

polymers, or rubber) and (ii) a magnetic element, which may consist of a

ferrite permanent magnet material (commonly, strontium or barium

ferrite, or a combination of the two), a metal alloy (such as NdFeB or

Alnico), any combination of the foregoing with each other or any other

material, or any other material capable of being permanently

magnetized. Subject flexible magnets may be in either magnetized or

unmagnetized (including demagnetized) condition, and may or may not

be fully or partially laminated or fully or partially bonded with paper,

plastic, or other material, of any composition and/or color. Subject

flexible magnets may be uncoated or may be coated with an adhesive or

any other coating or combination of coatings. Specifically excluded from

the scope of this order are printed flexible magnets, defined as flexible

magnets (including individual magnets) that are laminated or bonded

with paper, plastic, or other material if such paper, plastic, or other

material bears printed text and/or images, including but not limited to

business cards, calendars, poetry, sports event schedules, business

promotions, decorative motifs, and the like. This exclusion does not apply

to such printed flexible magnets if the printing concerned consists of only

the following: a trade mark or trade name; country of origin; border,

stripes, or lines; any printing that is removed in the course of cutting

and/or printing magnets for retail sale or other disposition from the

flexible magnet; manufacturing or use instructions (e.g., ‘‘print this side

                                                      

14 Raw Flexible Magnets from the People’s Republic of China and Taiwan: Final Results of the

Expedited Sunset Reviews of the Antidumping Duty Orders, 78 FR 77423, December 23, 2013.

15 The term ‘‘shape’’ includes, but is not limited to profiles, which are flexible magnets with a

nonrectangular cross‐section.

16 Packaging includes retail or specialty packaging such as digital printer cartridges.
I‐5

up,’’ ‘‘this side up,’’ ‘‘laminate here’’); printing on adhesive backing (that

is, material to be removed in order to expose adhesive for use such as

application of laminate) or on any other covering that is removed from

the flexible magnet prior or subsequent to final printing and before use;

non– permanent printing (that is, printing in a medium that facilitates

easy removal, permitting the flexible magnet to be re–printed); printing

on the back (magnetic) side; or any combination of the above. All

products meeting the physical description of subject merchandise that

are not specifically excluded are within the scope of this order.17

U.S. tariff treatment

The raw flexible magnets products that are the subject of these reviews are currently

imported under the following Harmonized Tariff Schedule of the United States (“HTSUS”)

subheadings: 8505.19.10 (flexible magnets) and 8505.19.20 (composite goods containing

flexible magnets) at a general rate of duty of 4.9 percent ad valorem.

Domestic like product and domestic industry

In the final phase of the original investigations, the Commission defined a single

domestic like product, coextensive with the scope of the investigation.18 The Commission also

defined the domestic industry as consisting of all producers of raw flexible magnets and did not

exclude any domestic producer as a related party.19

In its notice of institution for this review, the Commission solicited comments from

interested parties regarding the appropriate domestic like product and domestic industry. In

the domestic interested parties’ response to the Commission’s notice of institution, it indicated

that it agrees with the Commission’s definition of the domestic like product and domestic

industry that were adopted in the original investigation.20 No further comment on the domestic

like product or domestic industry has been filed with the Commission in this proceeding.

                                                      

17 Raw Flexible Magnets from the People’s Republic of China: Countervailing Duty Order, 73 FR

53849, September 17, 2008, Antidumping Duty Order: Raw Flexible Magnets from the People’s Republic

of China, 73 FR 53847, September 17, 2008. Antidumping Duty Order: Raw Flexible Magnets from

Taiwan, 73 FR 53848, September 17, 2008. 18 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 7.

19 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 9.

20 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 31.
I‐6

Description and uses21

Flexible magnets are permanent magnets that can be twisted, bent, slit, punched,

coiled, and otherwise molded into any shape without loss of magnetic properties.  Raw flexible

magnets consist of sheet (or sheeting), strip, and thermoplastic profile shapes, typically of

uniform thickness and surface finish.  Figure I‐1 presents a depiction of various types of sheet,

strip, and profile shape flexible magnets produced by Magnum.

Figure I-1 

Raw flexible magnets: Product forms 

Source: Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701-TA-452 and 731-TA-1129-1130 

(Final), USITC Publication 4030, August 2008, figure I-1. 

Magnetic sheet is characterized as “(s)heets of material that are highly flexible and have

permanent magnetic properties.” Sheet, which is generally (but not exclusively) produced by

the calendaring process described below, is the widest form of raw flexible magnet, typically

available in widths up to approximately 24 inches. Flexible magnetic strips are dimensionally

narrower than sheet.  According to testimony at the staff conference, “(s)trips may be

produced by cutting sheets into much narrower products, or they may be made by extruding

the materials to its final dimension.  Thicker strips typically are extruded.” Finally, profile shapes

are flexible magnets that are not square or rectangular in cross section. Thermoplastic profile

shapes are manufactured exclusively by the extrusion method.

In general, flexible magnets are used in a number of applications such as refrigerator

door gaskets; magnetic car and safety signs; direct mail promotional items; magnetic business

cards; advertising signs; calendars; nameplates; and toys and games.  The key physical

                                                      

21 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008.
I‐7

characteristics and similarities among all flexible magnets include magnetism, thinness,

flexibility, lightness of weight, and ease of cutting.  Raw flexible magnet profile shapes are used

in the production of commercial products such as refrigerator doors, shower doors, and

merchandise exhibits.  Raw flexible magnetic sheet and strip are typically used to produce

refrigerator magnets, magnetic business cards such as used by real‐estate agents in

promotional applications, and label holders for metal shelving.

Production process22

Raw flexible magnets are manufactured by consolidating a mixture (in either granular or

slurry form) of magnetic ferrite powders such as strontium or barium with a flexible resin

binder (polymer), then transferring the mixture to one of several varieties of forming processes

(namely calendaring, coating, or extrusion).  The product ‐ in sheet form, narrower strip form,

or as a profile shape ‐ is finished and prepared for shipment, typically in rolls or coils (Figure I‐

2).

Figure I-2 

Raw flexible magnets: Manufacturing process 

Source: Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701-TA-452 and 731-TA-1129-1130 

(Final), USITC Publication 4030, August 2008, figure I-2. 

                                                      

22 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Staff Report, INV‐FF‐087, June 30, 2008, pp. I‐11‐14.
I‐8

In the calendering process, the magnetic particulate (a mixture of ferrite metals and

resins) is fed through a calender, where it is pressed between two large rotating steel rolls to

create magnetic sheets or strip of uniform thickness and surface finish.  In the extrusion

process, the magnetic particulate is forced through a shaped die to create rectangular or square

sheets, strips, or other profile shapes.  In the coating process the magnetic material is coated

onto a carrier material such as paper, using a slot die or similar coating method.  These

materials are then cut, scored, slit, or die‐cut into many different sizes.  Some types of flexible

magnet sheeting are laminated with paper or plastic (typically white, but can be any color), or

are coated with an adhesive (in most cases a pre‐printed or decorated laminate) or other

material. A minority of flexible magnets is shipped in rolls or coils, but the manufacturer cuts

most magnetic sheeting into various sized (widths and lengths) sheets to be shipped in stacks to

the customer or distributor.

In the original investigations, Magnum reported that slitting might add approximately

*** percent value to the product by a converter, however, Magnum typically charged

customers *** for most of its slitting.  Likewise, although Magnum typically charged *** for

cutting operations, whereas converters might add *** percent of the value in their cutting

operations.  For extrusions and small pieces of sheeting, cutting is done on a punch press and

can add *** percent in value.  Likewise, scoring can add *** percent of the value if the score is

down the length of the web, as with slitting; or it can add *** percent of the value if must be

done across the width of the magnet with a punch press (as with cutting), depending on the

distance between “scores.”  Die cutting may add *** percent of the value, depending on the

method used and the size of the piece:  a punch press with a steel‐rule die or by creating

“score” lines within a die cut piece.  According to Magnum, in some cases, one or more of the

steps can be combined for a single product, resulting in cumulated added values from each

step.  Slitting, cutting, and scoring, for example, can be combined resulting in cumulated added

values.  Die‐cutting, meanwhile, is typically not combined with any other type of converting.   

According to Magnum, in describing its value‐added operations, most laminating is done

by the flexible magnet manufacturer or printer, not by a converter.  A converter’s laminating

operations would generally be limited to 60‐mil 3" wide extrusions, and most commonly would

involve adding an adhesive backing to the magnet, resulting in added value of approximately

*** percent.  Laminating is only performed on a small range of products by converters but is

performed by Magnum on its products.

Raw flexible magnets can be magnetized by either the producer at various stages of the

manufacturing process or by the customer, depending on the particular customer’s material

handling needs. There are no particular handling precautions that have to be taken with flexible

magnets since they are relatively weak magnetically, are not brittle, and can be used up to

temperatures of *** degrees centigrade or more.

Interchangeability and customer and producer perceptions

In its original investigation, the Commission observed that “the predominant forms of

raw flexible magnets, sheet and strip, could be produced through either a calendering or

extrusion process. Raw flexible magnets of the same type produced using different processes

were generally interchangeable. Raw flexible magnets used in commercial applications such as
I‐9

refrigerator gaskets, however, were generally not interchangeable with raw flexible magnets

used for printed applications.”23 The Commission reaffirmed what it noted in its preliminary

determinations, namely “that raw flexible magnets, regardless of their shape or production

process, are part of a continuum with no clear dividing lines. There are limitations in

interchangeability among various types of raw flexible magnets, notably between the products

produced for gaskets and those produced for refrigerator magnets, but a lack of complete

interchangeability among types of products comprising a continuum is not unexpected.”24 The

Commission remarked when addressing cumulation that “{a} majority of each type of market

participant reported that subject imports from China and the domestic like product were at

least frequently interchangeable. A majority of U.S. producers and purchasers reported that

subject imports from Taiwan and the domestic like product were at least frequently

interchangeable; all importers reported that subject imports from Taiwan and the domestic like

product were at least sometimes interchangeable. A majority of U.S. producers and purchasers

reported that subject imports from China and Taiwan were at least frequently interchangeable;

all importers reported that subject imports from China and Taiwan were at least sometimes

interchangeable.”25 The Commission noted that “the record indicates significant fungibility

among products from different sources” and that “{m}arket participants overwhelmingly find

raw flexible magnets from different sources to be at least sometimes interchangeable.” The

Commission observed that the “domestic like product, subject imports from China, and subject

imports from Taiwan are each primarily produced through the calendering process and sold in

the form of sheeting.”26 The Commission continued “{w}hile there are some differences in

channels of distribution between the subject imports, on the one hand, and the domestic like

product, on the other, a substantial proportion of the domestic like product and a majority of

imports from each subject source are sold to the same type of customer: printers.” The

Commission also stated that the “record also indicates geographic overlap among products

from different sources” and that the “domestic like product, subject imports from China, and

subject imports from Taiwan were simultaneously present in the U.S. market throughout the

period of investigation.” Accordingly, the Commission concluded that “there is a reasonable

overlap of competition between the domestic like product and subject imports from China and

Taiwan, and between the subject imports from China and Taiwan” and consequently cumulated

                                                      

23 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 6.

24 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 6.

25 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, pp. 10‐11.

26 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 11.
I‐10

subject imports from China and Taiwan for its analysis of material injury by reason of subject

imports.27

Channels of distribution

In the original investigations, the majority of shipments by both U.S. producers and U.S

importers of raw flexible magnets from China and Taiwan were to end users (i.e., printers and

OEMs) rather than distributors or retailers. For U.S. producers, during 2005‐2007 and January‐

March 2008, sales to printers accounted for 35.3‐38.5 percent of U.S. shipments and sales to

OEMs accounted for 40.0‐45.3 percent of U.S. shipments.28 For China subject importers, sales

to printers accounted for *** percent of U.S. shipments and sales to OEMs accounted for ***

percent of U.S. shipments.29 For Taiwan subject importers, sales to printers accounted for ***

percent of U.S. shipments ***. 30 In their response to the notice of institution, domestic

interested parties noted that demand form printers has shifted increasingly in the direction of

thinner magnetic sheeting, which has reduced the volumes of product needed to meet their

requirements.31

Pricing and related information

In the original investigation, the Commission collected price data for six products.  A

total of 101 quarterly net weighted‐average U.S. f.o.b. selling price comparisons were possible

between the domestic and imported Chinese raw flexible magnets and imported Taiwan raw

flexible magnets shipped to U.S. customers during 2005‐March 2008. In total, products

imported from China undersold the U.S.‐produced product in 24 of 37 possible quarterly

comparisons and products imported from Taiwan undersold the U.S.‐produced product in 48 of

64 possible quarterly comparisons.32

Since raw flexible magnets are a raw material product with many end‐use applications,

including promotional magnets, magnetic signs, trade show displays, custom parts, office

supplies, refrigerator gaskets, and schedules, the overall demand for raw flexible magnets is

                                                      

27 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, pp. 11‐12.

28 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Staff Report, INV‐FF‐087, June 30, 2008, table II‐1.

29 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Staff Report, INV‐FF‐087, June 30, 2008, table II‐1.

30 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Staff Report, INV‐FF‐087, June 30, 2008, table II‐1.

31 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 14.

32 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, table V‐8.
I‐11

closely linked to the demand for those end‐use products.33 Demand for raw flexible magnets

tends to fluctuate from period to period. In the original investigations, Magnum reported there

was seasonality in its sales of raw flexible magnets: 40 percent of its sales occur in the first six

months of the year (with a spike in March attributed to sales of baseball schedules) and 60

percent of their sales occur in the last half of the year (attributed to advertisement budget

cycles and the issuance of new calendars).34 Furthermore, when parties were asked during the

hearing to discuss any anticipated changes in future demand, the petitioner reported that

demand will follow the course of the economy in general. One importer reported that the

magnet industry is a maturing industry, but it has not yet matured, and demand will continue to

grow.35

Raw materials account for the largest share of the cost of producing raw flexible

magnets.  During January 2005‐March 2008, raw materials costs accounted for slightly more

than one‐half of the cost of goods sold. The primary raw material used in the production of raw

flexible magnets in the United States is primarily manufactured ferrite powders combined with

polymer binders. 36

THE INDUSTRY IN THE UNITED STATES

U.S. producers

In the original investigation, the Commission issued questionnaires to the six firms that

participated in the preliminary phase of these investigations and to two additional firms

identified as producers of photo pockets by other firms in the industry. The Commission

received questionnaire responses with usable data from *** firms, believed to account for

more than 95 percent of the U.S. production of raw flexible magnets during January 2005‐

March 2008. Magnum, the petitioner in the original investigation, accounted for *** percent of

reported U.S. production of the domestic like product in 2007 and *** accounted for ***

percent.37

In its substantive response to the Commission’s notice of institution, Magnum identified

six known and currently operating raw flexible magnets producers. Table I‐1 lists the domestic

interested parties (believed to account for *** percent of production of the domestic like

                                                      

33 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, II‐4.

34 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, II‐5.

35 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, II‐6.

36 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, V‐1.

37 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Staff Report, INV‐FF‐087, June 30, 2008, table III‐1.
I‐12

product in 2012), and share of reported production of raw flexible magnets in 2012. Neither

Magnum nor *** directly imports the subject merchandise from China or Taiwan, and neither is

known to have any affiliation with subject Chinese or Taiwan producers of raw flexible

magnets.38

Table I-1 

Raw flexible magnets: U.S. producers’ responding to the notice of institution shares of 2007 and 

2012 reported U.S. production 

* * * * * * * 

In the domestic interested parties’ substantive response to the Commission’s notice of

institution, six firms were identified as current producers of raw flexible magnets in the United

States: (1) Magnum, (2) The Electrodyne Company, (3) Flexmag Industries, Inc., (4) ILPEA

Industries (“ILPEA”), (5) Magnecote, and (6) Magnet Technology. In their response to the

Commission’s notice of institution, the domestic interested parties indicated that they agree

with the Commission’s definition of the domestic like product and domestic industry that were

adopted in the original investigation.39 Furthermore, the domestic interested parties reported

that they are not aware of other currently operating U.S. producers that are related parties.40

U.S. producers’ trade and financial data

The Commission requested domestic interested parties to provide trade and financial

data in their response to the notice of institution of the five‐year reviews of the subject orders.

Table I‐2 presents the data reported by responding U.S. producers from both the original

investigation (2005‐07) and the response to the notice of institution (2012). The table presents

data provided by *** firms for the period 2005‐07, and presents data for 2012 for Magnum and

*** combined.

                                                      

38 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 9 and Domestic interested parties’ Response to the Commission’s Cure Letter, p. 3.

39 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 31.

40 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 12, fn 20.
I‐13

Table I-2 

Raw flexible magnets: U.S. producers’ trade and financial data, 2005-07 and 2012 

Item 2005 2006 2007 2012 

Capacity (1,000 pounds) 131,003 153,196 154,696 ***

Production (1,000 pounds) 87,527 88,385 75,007 ***

Capacity utilization (percent) 66.8 57.7 48.5 ***

U.S. shipments 

 Quantity (1,000 pounds) 81,765 83,637 70,401 ***

 Value ($1,000) 87,351 89,235 79,217 ***

 Unit value (dollars per short ton) $1.07 $1.07 $1.13 ***

Net sales value ($1,000 dollars) 93,670 96,738 85,819 ***

Cost of goods sold (COGS) ($1,000) 76,522 78,008 67,995 ***

Gross profit or (loss) ($1,000) 17,148 18,730 17,823 ***

SG&A ($1,000) 16,629 15,111 13,354 ***

Operating income or (loss) ($1,000) 519 3,619 4,470 ***

COGS/sales (percent) 81.7 80.6 79.2 ***

Operating income or (loss)/sales (percent) 0.6 3.7 5.2 ***

Source: Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701-TA-452 and 731-TA-1129-1130 

(Final), USITC Publication 4030, August 2008, table C-1 and Domestic interested parties’ Substantive 

Response To The Notice Of Institution, September 3, 2013, exh. 8. 

U.S. IMPORTS AND APPARENT CONSUMPTION

U.S. importers

In the original investigations, 42 firms, accounting for over 95 percent of total U.S.

imports of raw flexible magnets, supplied useable questionnaire responses to the Commission.

Imports from China were concentrated among the following 10 firms: ***. Jasdi USA, affiliated

with Jasdi in Taiwan, accounted for *** reported imports of raw flexible magnets from

Taiwan.41

In its substantive response to the Commission’s notice of institution, the domestic

interested parties reported that there have been very few or no imports of subject merchandise

from China or Taiwan since the orders were imposed.42 Domestic interested parties are aware

                                                      

41 Raw Flexible Magnets from China and Taiwan, INV‐FF‐087, July 30, 2008, pp. IV‐1, IV‐4.

42 This statement is based on domestic interested parties’ market intelligence and compilations of

vessel manifest information (the response to notice of institution did not, however, include these

compilations). Response, p. 4 and n. 4. Furthermore, import data are not available for the current

reviews. In the original investigations, U. S. import data were based on questionnaire responses, which

collected quantity data in 1,000 pounds. Official import statistics cannot be relied upon to disclose

amounts of or trends in subject imports because (1) the Harmonized Tariff Schedule of the United States

subheadings in question also cover substantial nonsubject imports within their scope and (2) the unit of

(continued...)
I‐14

of one Chinese producer, Jingzhou Meihou Flexible Magnet Co., Ltd., requesting a new shipper

review from Commerce.43 Further, the domestic interested parties said it is possible that one or

more of the firms that requested scope inquiries from Commerce may have imported small

volumes of subject merchandise, but they do not have any definitive information indicating

whether there were any such imports. Finally, the domestic interested parties believe that JLP

Company, Inc. has imported relatively small volumes of wide‐format flexible magnet sheeting

produced by Jasdi in Taiwan.44

U.S. imports

In its original investigation, the Commission found the increase in subject imports, both

on an absolute basis and relative to consumption, to be significant.45 U.S. subject imports from

China increased from *** pounds in 2007 to *** pounds in 2007.46 U.S. subject imports from

Taiwan decreased from *** pounds in 2007 to *** pounds in 2007.47 The volume of cumulated

subject imports increased from *** pounds in 2005 to *** pounds in 2006, and then to ***

pounds in 2007.48 Cumulated subject imports’ share of the total quantity of imports was steady

during the original investigations, ranging from *** percent to *** percent.

Ratio of imports to U.S. production

Cumulated subject imports of raw flexible magnets as a ratio to U.S. production

increased from *** percent in 2005 to *** percent in 2007.49 Imports from nonsubject sources

as a ratio to U.S. production increased from *** percent in 2005 to *** percent in 2007.50 Total

                                                      

(...continued)

quantity specified in the HTS for reporting subject merchandise under these subheadings is “number”

whereas the Commission relied upon quantity measured in 1,000 pounds.

43 The importer of the subject merchandise was not identified in the public version of the

companies’ submissions to Commerce.  The new shipper review was subsequently rescinded. Response,

pp. 26‐27 and n. 64. 44 Ibid., p. 27.

45 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. 20.

46 Subject imports from China were *** in January‐March 2008 compared to *** in January‐March

2007. 47 Subject imports from Taiwan were *** pounds in January‐March 2008 compared to *** pounds in

January‐March 2007.

48 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

Confidential Views of the Commission, p. 31.

49 The ratio of cumulated subject imports to U.S. production was *** percent in January‐March 2008

compared to *** percent in January‐March 2008.

50 The ratio of nonsubject imports to U.S. production was *** percent in January‐March 2008

compared to *** percent in January‐March 2008.
I‐15

imports as a ratio to U.S. production increased from 4.4 percent in 2005 to 11.4 percent in 2007

of total reported U.S. production during 2005‐07.51

Apparent U.S. consumption and market shares

During the original investigations, apparent consumption decreased from 85.6 million

pounds in 2005 to 78.4 million pounds in 2007.52 The responding producers’ share of

consumption was 95.6 percent in 2005 and 89.8 percent in 2007.

In its original determination, the Commission found that demand for raw flexible

magnets is closely linked to the demand for the end‐use products, such as promotional

materials, magnetic signs, and refrigerator gaskets, in which they are incorporated. Magnum

indicated that demand for raw flexible magnets tends to track changes in the U.S. economy in

general and in the U.S. real estate market in particular. At the hearing, a Magnum witness

stated that real estate professionals purchase a large percentage of flexible raw magnets used

to produce promotional materials and that the downturn in the U.S. real estate market may

help explain the declines in apparent U.S. consumption for raw flexible magnets evident during

the latter period for which data were collected in these investigations.53 According to domestic

interested parties, the antidumping and countervailing duty orders allowed the domestic

industry to survive the recession and *** production and profitability during the slow recovery

that has followed.54

THE INDUSTRY IN CHINA

Background

During the original investigation, the petition identified 58 alleged producers/exporters

of raw flexible magnets in China. Foreign producer questionnaires were issued to producers

with contact information in the petition, plus 12 additional producers identified by staff.

Chinese producers and exporters of raw flexible magnets supplied three questionnaires.

Respondent Newlife estimated that the three responding firms accounted for approximately

*** percent of production in China.55 Respondents to the original questionnaire included Cixi

City, Newlife, and Polyflex.

                                                      

51 The ratio of total imports to U.S. production was 4.7 percent in January‐March 2008 compared to

7.3 percent in January‐March 2008.

52 Apparent consumption was 17.2 million pounds in January‐March 2008 compared to 19.2 million

pounds in January‐March 2007.

53 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, pp. 15‐16. 54 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, p. 14. 55 Raw Flexible Magnets from China and Taiwan, INV‐FF‐087, July 30, 2008, p, VII‐1.
I‐16

The Commission did not receive any responses to the notice of inquiry from foreign

producers or exporters. The domestic interested party identified 30 Chinese

producers/exporters of raw flexible magnets.56

Capacity and production

During the original investigation, three firms provided data on their individual capacity

and production in 2007. The two largest firms (***) combined accounted for approximately ***

percent of the reported production and *** percent of the reported exports to the United

States (equivalent to *** percent of U.S. subject imports]) in 2007.57 Since no Chinese

producers responded to the notice of institution, no further data are available specific to the

production or capacity of subject raw flexible magnets in China.

THE INDUSTRY IN TAIWAN

Background

During the original investigation, the petition identified six alleged producers/exporters

of raw flexible magnets in Taiwan. Foreign producer questionnaires were issued to producers

with contact information in the petition, plus four additional producers identified by staff.

Taiwan producers and exporter Jasdi and Magruba supplied questionnaire responses, and these

two firms were the only firms identified by importer questionnaire responses as their suppliers

during the period for which data were collected.58  

The Commission did not receive any responses to the notice of inquiry from foreign

producers or exporters. The domestic interested party identified 11 Taiwan

producers/exporters of raw flexible magnets.59

Capacity and production

During the original investigation, two firms provided data on their individual capacity

and production in 2007. The two firms combined accounted for *** pounds of production and

*** million pounds of exports to the United States (equivalent to *** of U.S. subject imports

                                                      

56 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, exh. 3. 57 Raw Flexible Magnets from China and Taiwan, INV‐FF‐087, July 30, 2008, tables VII‐1, VII‐2, and

IV‐2.

58 Raw Flexible Magnets from China and Taiwan, Inv. Nos. 701‐TA‐452 and 731‐TA‐1129‐1130 (Final),

USITC Publication 4030, August 2008, p. VII‐4.

59 Domestic interested parties’ Substantive Response To The Notice Of Institution, September 3,

2013, exh. 4.
I‐17

from Taiwan]) in 2007.60 Since no Taiwan producers responded to the notice of institution, no

further data are available specific to the production or capacity of subject raw flexible magnets

in Taiwan.

Trade remedy measures in third‐country markets

During the original investigation, there were no antidumping duty investigations on raw

flexible magnets from China or Taiwan in third‐country markets. No trade remedy

investigations in third country markets have been identified since the original investigations.

                                                      

60 Raw Flexible Magnets from China and Taiwan, INV‐FF‐087, July 30, 2008, tables VII‐4 and IV‐2.