CIT Sustains Specificity Finding as to Vietnamese Traded Goods Sector in Car/Light Truck Tire CVD Investigation
The Court of International Trade sustained Aug. 22 the Commerce Department’s finding that a Vietnamese currency undervaluation program was specific to the traded goods sector, and thus countervailable in a countervailing duty investigation on passenger vehicle and light truck tires. The court said Commerce’s analysis was properly based on predominant use, distinguishing it from a disproportionality analysis.
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CIT Judge Timothy Reif held in a prior remand order, issued publicly Oct. 18, that Commerce had the authority to countervail currency undervaluation programs (see 2410280035).
Vietnamese exporters led by Kumho Tire argued that, first, the department’s specificity finding wasn’t narrow enough and thus wasn’t supported by the language of the statute (see 2503110052), and, second, that Commerce made an undue assumption that the subsidy was “spread evenly in the traded goods sector.”
In his remand order, Reif directed Commerce to respond to both points, although he said he himself didn’t quite understand the relevancy of the latter.
He agreed with the government’s explanation that it properly defined the Vietnamese traded goods sector as “a unitary whole, similar to an ‘industry’ or ‘enterprise.’” He said “Commerce’s decision in this case to treat companies that sell goods internationally as a 'group' under § 1677(5A)(D) is in accordance with law” because the statute doesn’t limit the size of a “group,” nor require “shared characteristics.”
He distinguished this case from Hyundai Steel, an ongoing case that has seen CIT Judge Claire Kelly twice remand a different grouping by Commerce of the three largest, apparently entirely unrelated users of a South Korean energy subsidy (see 2508190057).
On the second point, he said that Commerce had denied making any such assumption and agreed that the department properly addressed it. He noted that Commerce had found that Vietnam was economically diverse, so the subsidy appeared de facto specific for reasons other than a lack of economic diversification in the country.
The Hyundai Steel case is based on a finding of disproportionality, not predominant use, he said.
The exporters also argued that Commerce had failed to properly explain why it relied on two Vietnamese net foreign exchange purchases reports issued by the Treasury Department despite the large discrepancy between reports -- one, covering four quarters through June 2019, described the country’s net foreign exchange purchases as equal to about $2.1 billion, while another, covering the 2019 calendar year, put that same figure at about $22 billion.
Reif found Commerce’s explanation complied with his remand order.
In its redetermination, the department explained that there had been significant financial turmoil during the latter part of 2018 that “led to a pullback from other small emerging markets and created downward pressure on many emerging market currencies, including the [Vietnamese] dong.” Then, “[a]s global financial conditions eased and holiday-related remittances increased in early 2019, the authorities shifted to purchasing foreign exchange,” it said.
The department also noted that most of Vietnam’s foreign exchange purchases during the review period came in the second half of 2019, Reif said.
The judge also asked the department to reconsider or further explain its specificity finding because it failed to properly demonstrate how its somewhat spotty record evidence supported its conclusion.
Specifically, in his remand opinion, he noted the department considered certain information to be missing from the record, but was unclear “what precisely” that information was. He also was unsure as to the ways in which Commerce claimed the Vietnamese government failed to fulfill other information requests.
He asked Commerce to “state clearly” what statutory authority it relied on when it used, first, “available data for [US dollar] inflows to Vietnam as a proxy for [US dollar] currency conversions,” and, second, International Monetary Fund data showing inflows of U.S. dollars into Vietnam.
He also asked the department to further explain its decision to use four major exchange channels when making an estimate of “‘the total proportion of USD inflows’ to Vietnam during the” period of review: Vietnamese exports of goods, Vietnamese exports of services, earned income from other countries and “various forms of portfolio and direct investment.”
After the remand, he said he was satisfied with the government’s explanations (see 2501160060).
(Kumho Tire (Vietnam) Co., Ltd. v. United States, Slip-Op. 25-109, CIT # 21-00397, dated 08/22/25; Judge: Timothy Reif; Attorneys: Jeffrey Winton of Winton & Chapman for plaintiff Kumho Tire (Vietnam) Co.; Sosun Bae for defendant U.S. government; Elizabeth Drake of Schagrin Associates for defendant-intervenor the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC)