Caterpillar Challenges UK's 18.81% Anti-Dumping Duty on Chinese Excavators

Caterpillar has brought a legal challenge against the UK's Trade Remedies Authority (TRA) to overturn an 18.81% anti-dumping duty on Caterpillar's China-built excavators. Caterpillar is the world's largest construction equipment manufacturer. Caterpillar's lawyers said in a filing that the duty was high enough to stop Caterpillar exporting the affected product from China to the UK. The duty applies for five years.

The TRA imposed duties on Caterpillar and other exporters from China last year after British equipment manufacturer JCB complained about unrealistically cheap excavator imports. The TRA's investigation found that China-built excavators entered the UK at unfairly low prices. The TRA cited materials subsidized by the state, including cheap steel. The investigation covered midsized and heavy-duty excavators commonly used at commercial construction sites.

Caterpillar argues that the TRA's reasoning behind the duty was flawed. Tristan Jones KC, Caterpillar's barrister, said the analysis had gone seriously wrong because Caterpillar charged more for excavators exported to the UK than for excavators sold domestically in China. Jones argued in a written submission that the TRA inflated Caterpillar's costs and profits beyond actual Chinese levels. Jones said that calculation treated Caterpillar as dumping despite Caterpillar charging premium export prices in the UK.

However, Philip Moser KC, the TRA's barrister, said none of Caterpillar's grounds for challenging the decision had merit. Moser argued in a written submission that artificially cheap steel or electricity resulting from non-commercial factors, such as government subsidies, creates a particular market situation across the market.

Mr Justice Richards is hearing the case in London this week. Trade lawyers said the proceedings represented the first court challenge of this kind concerning anti-dumping tariffs since the UK left the EU. James Casey, London-based counsel at French law firm Gide, described the case as the first substantive post-Brexit dispute about calculating anti-dumping duties. Casey, who is not involved in the proceedings, said the case would help develop UK case law on methodology for anti-dumping investigations.

A Caterpillar subsidiary in Xuzhou brought the case. The High Court in London dismissed an earlier judicial review claim by Caterpillar against the TRA last year. Caterpillar's earlier claim argued that officials gave inadequate notice when the investigation began. The current case instead contests the calculation of the final tariff.