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Trade Court Says No Remand to Review China-Wide AD Rate Despite Prejudice to Tire Exporter

The Court of International Trade appeared in a May 22 decision to sympathize with the idea that the Commerce Department should have taken into account a cooperative China-wide exporter's own data to recalculate the China-wide rate in an antidumping review, but ultimately the court declined to remand for a recalculation because the exporter had requested a remand to make it a separate rate respondent, not to review the China-wide entity.

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Judge Timothy Stanceu said that, although the relevant Commerce regulation only allows a domestic interested party or the Chinese government to seek a review of the China-wide entity, the U.S. Court of Appeals for the Federal Circuit's 2017 decision in Diamond Sawblades Mfrs. Coal. v. U.S. meant Guizhou Tyre could have claimed that any China-wide rate applied to the exporter "should have been derived through a methodology that reflected, in part, GTC’s own data." In Diamond Sawblades, the appeals court upheld a China-wide rate recalculated as the average of a cooperating China-wide company's calculated rate and the existing China-wide rate.

However, because GTC was given the opportunity to challenge Commerce's remand results after the Diamond Sawblades decision came out but the exporter did not seek a recalculation of the China-wide entity rate, the court cannot order another remand in this case on the 2015-16 review of the AD order on off-the-road tires from China, CIT said. Stanceu noted that GTC did not claim that the court should issue a remand "directing Commerce to review the PRC-wide entity," nor did they say that Commerce's regulation "should be declared invalid as contrary to the Tariff Act."

Commerce claimed on remand that GTC was not prejudiced by its inability to request a review of the China-wide rate since the company was, in fact, reviewed. Stanceu disagreed, since a review of the China-wide rate could have led to a lower rate than the 105.31% margin the agency saddled the exporter with based on the record in the review, which included data from GTC.

Stanceu was also not convinced that GTC was reviewed, finding that a reviewed respondent "is not necessarily an individually examined" one. Commerce did not allow GTC to be individually examined or request a review based on an examination of all the sales made by the China-wide entity. But the prejudice identified by Stanceu ultimately did nothing for the exporter's dumping rate, given that they did not seek a remand of the China-wide rate.

The court added that key precedent from the U.S. Court of Appeals for the Federal Circuit, in China Mfrs. Alliance v. U.S. and Diamond Sawblades, precludes relief on the claim that GTC, even if failing to rebut the presumption of government control, is entitled to a separate rate. The CMA opinion said that a China-wide rate can be an individually investigated rate since the agency treated companies comprising the China-wide rate as a single entity and investigated them as such in the original investigation.

GTC also challenged Commerce's decision finding the company failed to rebut the presumption of state control. The agency said the Guiyang State-Owned Assets Supervision and Administrative Commission, via its affiliate, Guiyang Industry Investment Group Co. (GIIG), held over 25% of GTC's shares, while no other individual entity owned more than 1%. Looking to two of the four factors for rebutting state control, Commerce said GIIG effectively controlled the selection of GTC's management and how the company deals with its profits. GTC said Commerce is not allowed to limit its consideration to just these two factors.

Stanceu was not convinced, finding that "there is no statutory language, legislative history, or regulatory language or preamble to serve as guidance under which the court may disallow the Department’s methodology as ultra vires or unreasonable per se." Addressing evidence GTC said the agency did not fully consider, Stanceu also said that Commerce was allowed "to draw the inference from ownership strucutre" that GTC's management, "while having some autonomy over the day-to-day operations, had not been demonstrated to be independent of the overall influence of the company’s largest, government-owned, shareholder."

(Guizhou Tyre Co. v. United States, Slip Op. 23-80, CIT Consol. # 18-00099, dated 05/22/23; Judge: Timothy Stanceu; Attorneys: Daniel Porter of Curtis Mallet-Prevost for plaintiffs led by Guizhou Tyre Co., Ltd.; Richard Ferrin of Faegre Drinker for plaintiff Valmont Industries; and John Todor for defendant U.S. government)